Which of the Following Most Likely Would Be an Advantage

question 29

Multiple Choice

Which of the following most likely would be an advantage in using classical variables sampling rather than monetary-unit sampling?

• A)An estimate of the standard deviation of the population's recorded amounts is not required.
• B)The auditor rarely needs the assistance of a computer program to design an efficient sample.
• C)Inclusion of zero and negative balances generally does not require special design considerations.
• D)Any amount that is individually significant is automatically identified and selected.

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Definitions:

Mental Accounting

The psychological process by which individuals classify, organize, and perceive their monetary resources and expenses.

Values

In economics, values refer to the importance or worth that is attached to goods or services, influencing their price and demand in the market.

Implicit Costs

The opportunity costs that are not directly paid for in dollars but represent the loss of benefits from the next best alternative when resources are not used in their best alternative use.

Mental Accounting

A concept in behavioral economics where individuals categorize and treat money differently depending on its source, intended use, or other psychological factors.