When Using a Statistical Sampling Plan, the Auditors Would Probably

question 57

Multiple Choice

When using a statistical sampling plan, the auditors would probably require a smaller sample if the:

• A) Population increases.
• B) Desired allowance for sampling risk decreases.
• C) Desired risk of incorrect acceptance increases.
• D) Expected deviation rate increases.

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Definitions:

FOB Destination

A shipping term indicating that the seller is responsible for the goods and the shipping cost until the goods reach the buyer's specified location.

Cost of Inventory

The total cost incurred to acquire stock items that are intended for resale, including purchase price, freight, and handling fees.

Physical Inventory

An actual count of all the goods on hand at the end of an accounting period.

Single-Step Income Statement

A simplified financial statement format that calculates net income by subtracting total expenses from total revenues in one step.