In performing a substantive test of the book value of a population, auditors must be concerned with two aspects of sampling risk. What are these two aspects of sampling risk, and which aspect is of greater importance to auditors? Explain.
Answer to relevant QuestionsUsing the approach presented in this chapter for mean-per-unit sampling, when is it necessary to calculate an adjusted allowance for sampling risk?An auditor used a nonstatistical sampling plan to audit the inventory of an auto supply company. The auditor tested the recorded cost of a sample of inventory items by reference to vendors’ invoices. In performing the ...Susan Harris is a new assistant auditor with the public accounting firm of Sparks, Watts, and Wilcox, CPAs. On her third audit assignment, Harris examined the documentation underlying 60 disbursements as a test of controls ...Scott Duffney, CPA, has randomly selected and audited a sample of 100 of Will-Mart’s accounts receivable. Will-Mart has 3,000 accounts receivable accounts with a total book value of $3,000,000. Duffney has determined that ...Define, and differentiate between, nonstatistical (judgmental) sampling and statistical sampling.
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