Non-Sampling Risk Arises When an Auditor

question 68

Multiple Choice

Non-sampling risk arises when an auditor

• A) does not use sampling.
• B) uses an inappropriate audit procedure.
• C) tests all of the items in a population.
• D) spends too much time testing the accounts most at risk of material misstatement.

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Definitions:

Par Value

The face value of a bond or stock as stated by the issuing company, which does not necessarily coincide with its market value.

Expiration Date

In finance, this term often refers to the date on which a derivative contract, such as an option or futures contract, becomes void and ceases to trade.

Option Contract

A financial derivative contract that grants the buyer the right, but not the obligation, to buy or sell an asset at a specified price on or before a certain date.

Exercise Price

The price at which the holder of an option can buy or sell the underlying security.