An Auditor Discovers That an Account Balance Believed Not to Be

question 79

Multiple Choice

An auditor discovers that an account balance believed not to be materially misstated based on an audit sample was materially misstated based on the total population of the account balance.This is an example of which of the following types of sampling risks?

• A)Incorrect rejection.
• B)Incorrect acceptance.
• C)Overreliance.
• D)Underreliance.

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Definitions:

Acceptance Sampling

A statistical quality control method that determines whether to accept or reject a batch of products based on a sample taken from the batch.

Defectives

Items or units that fail to meet the quality criteria set for them and are therefore considered unacceptable for use.

Probability

The branch of mathematics concerned with the analysis and interpretation of numerical data based on the likelihood of different outcomes.

Presale Testing

The process of evaluating the potential market success of a product or service before it is launched to the public.