What Is the Primary Objective of Using Stratified Sampling in Auditing

question 101

Multiple Choice

What is the primary objective of using stratified sampling in auditing?

• A) To increase the confidence level at which a decision will be reached from the results of the sample selected.
• B) To determine the occurrence rate for a given characteristic in the population being studied.
• C) To decrease the effect of variance in the total population.
• D) To determine the precision range of the sample selected.

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Definitions:

Disbursement of Funds

Disbursement of funds refers to the payment of money from a fund or account, typically for specific purposes or expenses.

ZBA

Zero Balance Account; a cash management tool in which funds are automatically transferred to maintain a zero balance, eliminating excess balances.

Working Capital Management

The management of a company's short-term assets and liabilities to ensure it has sufficient funds to continue its operations and meet short-term financial obligations.

Payables

Amounts owed by a company to suppliers or creditors for goods and services received but not yet paid for.