A Client Has a Large Number of Small Account Balances

question 12

Multiple Choice

A client has a large number of small account balances, with an equal likelihood of over and understatement. Which of the following sampling techniques would be most appropriate?

• A) Monetary unit sampling.
• B) Classical variables sampling.
• C) Attribute sampling.
• D) All of the above, depending on the circumstances.

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Definitions:

Cash Dividend

A payout from a company's profits, determined by the board of directors, given to a group of its stockholders as cash.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership interest of shareholders.

Board of Directors

A group of individuals elected to represent shareholders and govern the corporation's affairs, making key decisions on its behalf.

Prior Period Adjustment

A correction of errors in previously issued financial statements to reflect accurate past financial information.