Which of the Following Is a Correct Statement with Respect

question 56

Multiple Choice

Which of the following is a correct statement with respect to evaluating results when using nonstatistical sampling for substantive tests?

• A)When the projected misstatement exceeds the tolerable misstatement,the auditor should conclude that the population is not misstated.
• B)The closer the projected misstatement is to the tolerable misstatement,the higher the risk of material misstatement.
• C)When the projected misstatement is equal to zero,the auditors may conclude with certainty that no misstatements exist in the account.
• D)When the projected misstatement percentage exceeds the risk of incorrect acceptance the auditors will generally conclude that the population is materially misstated.

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Definitions:

Test Statistic

A value calculated from sample data used to make a decision about a hypothesis in statistical testing.

Null Hypothesis

In statistical hypothesis testing, the hypothesis that there is no effect or no difference, and it serves as the default assumption to test against.

Critical Value

A point on the test distribution that is compared to the test statistic to decide whether to reject the null hypothesis.

Degrees of Freedom

The number of independent values or quantities that can be assigned to a statistical distribution.