If the Size of the Sample to Be Used in a Test

question 4

Multiple Choice

If the size of the sample to be used in a test of attributes is not determined by using statistical concepts, but the sample is chosen in accordance with random selection procedures:

• A) no inferences can be drawn from the sample.
• B) the auditor has committed a nonsampling error.
• C) the auditor may or may not achieve the tolerable exception rate at the acceptable risk of assessing control risk too low.
• D) the auditor will have to evaluate results using the principles of discovery sampling.

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Definitions:

Time-Series Forecasting Methods

Statistical techniques used to analyze and make predictions based on data points collected or indexed in time order.

Historical Demand

The record of past customer demand for a product or service, used to predict future demand patterns and guide inventory and production planning.

Forecast

A prediction or estimate of future events or trends, especially regarding weather or economics.

Qualitative Forecasting Methods

Forecasting techniques that are based on judgment and opinion, rather than on strictly numeric or statistical data.