Variables Estimation Sampling Is Used

question 43

Multiple Choice

Variables estimation sampling is used

• A) when the auditor does not expect any errors in an account balance.
• B) to obtain a level of confidence that key attributes for the sample tested can be inferred to be in existence for the entire population.
• C) when the auditor conducts tests of controls.
• D) if the auditor expects more than a few errors in an account balance.

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Definitions:

Direct Non-Controlling Interest

A proportional interest in a subsidiary not held by the parent company, representing a share in the equity and profits of the subsidiary.

Retained Earnings

The portion of net income not distributed as dividends but retained by the company to be reinvested in its core business or to pay debt.

Limited

Describes a form of company structure that legally protects its shareholders' liability to the amount of capital they invested.

Consolidation Adjustment Entries

are journal entries made in the preparation of consolidated financial statements to eliminate transactions between entities within the same group, ensuring accurate representation of financials as if the group was a single entity.