Which of the Following Is Not True with Respect to the Use

question 65

Multiple Choice

Which of the following is not true with respect to the use of nonstatistical sampling?

• A)The use of nonstatistical sampling generally results in a smaller sample size.
• B)The use of nonstatistical sampling is permissible under generally accepted auditing standards.
• C)Auditors may use block and haphazard selection methods when using nonstatistical sampling.
• D)The use of nonstatistical sampling does not permit the auditor to control exposure to the risk of overreliance.

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Definitions:

Capital Asset Pricing Model

A model that describes the relationship between risk and expected return and that is used in the pricing of risky securities.

Expected Rate

The return that investors anticipate or predict receiving over a certain period, often used in the context of interest rates or investment returns.

Risk-free Rate

The return an investor would expect from an absolutely risk-free investment over a specified period.

Expected Market Rate

The anticipated return on investment in the market based on past trends and future forecasts.