Before Selecting a Sample,an Auditor Will Use Their Professional Judgement

question 38

Multiple Choice

Before selecting a sample,an auditor will use their professional judgement to:

• A)set the tolerable error rate
• B)select an appropriate population for testing
• C)set the required level of confidence
• D)all of the above

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Definitions:

Escalation of Commitment

A phenomenon where people increase their investment in a decision despite new evidence suggesting it may be wrong, often due to cognitive biases or emotional attachment.

Poor Choices

Decisions made that lead to suboptimal or negative outcomes, often due to a lack of information or foresight.

Substantial Costs

Significant expenses or outlays that a company or individual may incur.

Escalation of Commitment

The tendency to continue investing in a project or decision despite evidence of its failing, driven by emotional attachment or the desire to justify prior investments.