Auditors Use Attributes Sampling in Assessing the Effectiveness of a Client's

question 95

Multiple Choice

Auditors use attributes sampling in assessing the effectiveness of a client's internal controls to determine:

• A)The extent to which internal controls are operating as intended to prevent or detect misstatements.
• B)The degree of inherent risk associated with various account balances or classes of transactions.
• C)The degree of risk present in the client's business environment.
• D)The accuracy of the client's account balances or classes of transactions.

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Definitions:

Growth Potential

The capacity for future expansion or increased profits within a company or industry.

Staircase Analysis

A method used to assess and plan a product's or project's steps towards achieving a series of short-term goals leading towards a long-term goal.

Potential Sales

An estimate of the total sales revenue a company can potentially achieve in a specific market under ideal conditions.

Market Segments

Divisions within a market that congregate consumers or organizations with similar needs and characteristics, allowing for targeted marketing strategies.