Which of the Following Is True with Respect to the Use

question 61

Multiple Choice

Which of the following is true with respect to the use of sequential sampling when used with attributes sampling?

• A)Sequential sampling is normally used when expected deviations occur at a relatively low rate in the population.
• B)Sequential sampling is normally used when the audit team wishes to place greater reliance on internal control.
• C)Sequential sampling may provide a more efficient sample size than the use of traditional attributes sampling.
• D)Sequential sampling will always provide auditors with the smallest final sample size for a given set of sampling parameters.

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Definitions:

Capital Loss Carryforward

A tax provision that allows investors to use a net capital loss in one year to offset future capital gains for tax purposes.

Net Capital Gains

The profit from the sale of assets or investments after subtracting any losses, important for tax calculations.

Net Operating Loss

A situation in which a company's allowable tax deductions are greater than its taxable income within a tax period, leading to a negative taxable income.

Charitable Deduction

A tax deduction given for donations made to qualifying charitable organizations.