Indicate Whether You Agree or Disagree with the Following Statements

question 2

Essay

Indicate whether you agree or disagree with the following statements and explain your reasoning.
a) Helen Holt was explaining to her group partner that the completeness assertion implies that transactions and events that have been recorded have occurred and pertain to the entity.
b) Keith Lake was explaining to Ben Fitz how sampling risk works for the audit team: "Sampling risk is the risk that as auditors we will arrive at a conclusion that has nothing to do with sampling issues."
c) Larry Baneiro was vehemently arguing about the benefits of using non-statistical versus statistical sampling methods for a client in the excavation business. Here is what he had to say about non-statistical sampling: "Non-statistical sampling is easier to use than statistical sampling, it requires less staff training, it has lower cost, and it allows an auditor to make a sample choice that they believe is appropriate."
d) Georgia Walters has started her sample selection of sales transactions for a gemstone conglomerate. She believes that she can improve audit efficiency by stratifying the sample.

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Definitions:

Semi-Annual

Occurring twice a year; pertaining to a period of six months.

Coupon Bond

A debt security that pays the holder a fixed interest rate, known as the coupon, usually annually or semi-annually, until its maturity date.

Present Value

The present-day value of future money or cash flows, based on a specific rate of return.

Coupon Bonds

Debt securities that pay holders a fixed interest rate (the coupon) on a periodic basis until the bond matures, at which point the principal amount is repaid.