In Statistical Sampling,setting the Appropriate Confidence Level and Desired Sample

question 6

Multiple Choice

In statistical sampling,setting the appropriate confidence level and desired sample precision are decisions made by the auditor that will affect sample size for a substantive procedure.Which of the following should not be a factor in the choice of desired precision?

• A) The sampling risk.
• B) The size of an account balance misstatement considered material.
• C) The audit resources available for execution of the sampling plan.
• D) The objectives of the audit test being conducted.

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Definitions:

Public Utilities

Companies that provide essential services to the public, such as water, electricity, gas, and telecommunications, often regulated by the government.

ATC Curve

The Average Total Cost curve, it represents the per-unit total cost of production (fixed plus variable costs divided by total output) at various levels of output.

Short Run

In economics, the short run is a period during which at least one input, such as factory size or machinery, is fixed and cannot be changed.

Long Run

A period of time in which all factors in a production process can be varied, allowing for the adjustment to changes in market or economic conditions.