Which of the Following Statements Is Correct Concerning Statistical Sampling

question 41

Multiple Choice

Which of the following statements is correct concerning statistical sampling in tests of controls?

• A)As the population size increases, the sample size should increase proportionately.
• B)Deviations from specific internal control procedures at a given rate ordinarily result in misstatements at a lower rate.
• C)There is an inverse relationship between the expected population deviation rate and the sample size.
• D)In determining tolerable deviation rate, an auditor considers detection risk and the sample size.

---

Definitions:

Total Revenues

The cumulative revenue produced from the sales of products or services central to a business's main activities.

Gross Profit

Gross profit is the financial metric that results from subtracting the cost of goods sold from revenue, showing the profitability of a company before accounting for operating expenses.

Income from Operations

Net earnings generated from a company's normal business operations, excluding revenues and expenses from non-operational activities.

Periodic Inventory System

An inventory system where updates to inventory levels are made on a periodic basis rather than continuously.