The point estimate, by itself, is NOT an adequate measure of the population misstatement because of:
A) population biases.
B) control risk.
C) sampling error.
D) audit risk.

Question

Quizplus · Accepted Answer

The point estimate is only a single value that is based on a sample, and therefore it is subject to sampling error. Sampling error occurs because a sample is only a subset of the population, and therefore there is always some degree of uncertainty in the estimate of the population characteristic. Therefore, the point estimate alone is not an adequate measure of the population misstatement.

The Point Estimate, by Itself, Is NOT an Adequate Measure