Which of the Following Statements Is Correct Concerning Statistical Sampling

question 46

Multiple Choice

Which of the following statements is correct concerning statistical sampling in tests of controls?

• A)As the population increases,the sample size should increase proportionally.
• B)The expected population deviation rate can either be based on prior audits or a small sample of controls examined in the current year.
• C)There is an inverse relationship between the expected population deviation rate and sample size.
• D)In determining the tolerable rate of deviation,an auditor considers the desired level of detection risk.

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Definitions:

Brokerage Fee

A fee charged by a broker to execute transactions or provide specialized services.

Fair Value Method

An accounting approach used to assess and assign a market-based value to liabilities and assets.

Unrealized Gain

An increase in the fair value of equity or debt securities for a period.

Available-for-Sale

A classification for investments in debt or equity securities not classified as held-to-maturity or trading securities, marked to market with changes in fair value recorded in other comprehensive income.