Stratification Is When an Auditor Selects a Sample for Testing

question 34

True/False

Stratification is when an auditor selects a sample for testing by dividing the number of population items by the sample size,resulting in the sampling interval.

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Definitions:

Annual Depreciation

The annual expense taken for a fixed asset, representing a fraction of its cost spread over its lifespan.

Useful Life

The estimated duration of time that an asset is expected to be usable for its intended purpose, affecting depreciation calculations.

Salvage Value

The conjectured remaining value of an asset at the close of its functional lifetime.

Discount Rate

This refers to the interest rate employed in DCF calculations to figure out the present value of upcoming cash flows.