When a Client Uses a Service Organization to Process Certain

question 87

Multiple Choice

When a client uses a service organization to process certain transactions (e.g. ,its employee benefit plan) ,the auditor is least likely to obtain an understanding relating to these transactions by

• A)Contacting the service organization to obtain specific information.
• B)Visiting the service organization and performing procedures.
• C)Sending a confirmation request to the service organization.
• D)Obtaining and reading a Type 1 or Type 2 report from the service organization.

---

Definitions:

Preliminary Sample

An initial sample drawn from a population, often used to test procedures or make preliminary estimates before a larger study.

Interval Estimate

An estimate of a population parameter that provides a range of values within which the parameter is expected to lie, often associated with a specific confidence level.

Estimated σ

Approximation of the standard deviation (σ), a measure of the dispersion or variation of a distribution.

Normal Probability Distribution

A bell-shaped probability distribution, also known as Gaussian distribution, that is fully defined by its mean and standard deviation.