In Statistical or Nonstatistical Sampling Methods Used in Substantive Testing,an

question 39

Multiple Choice

In statistical or nonstatistical sampling methods used in substantive testing,an auditor most likely would stratify a population into meaningful groups if

• A) monetary-unit sampling (MUS) is used.
• B) the population contains both very high and very low recorded amounts.
• C) the auditor's estimated tolerable misstatement is extremely small.
• D) the standard deviation of recorded amounts is relatively small.

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Definitions:

Management By Exception

A management strategy where only significant deviations from expected results are addressed, allowing for more efficient use of resources.

Actual Results

The concrete outcomes or data obtained from actions or operations, compared against planned or predicted results.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity.

Static Budgets

A budget that is created for a single level of activity and does not change in response to variations in business activity levels.