What is one of the primary benefits of stratifying a population?
A) It allows different types of audit procedures to be performed on large and small transactions or components.
B) It allows the auditor to have a higher likelihood of reaching a favorable conclusion with respect to the client's financial statements.
C) It allows the auditor to reduce the necessary sample size.
D) It reduces the auditor's exposure to nonsampling risk.

Question

Quizplus · Accepted Answer

Stratifying a population allows the auditor to reduce the necessary sample size by narrowing down the population into specific groups or strata. This helps to target areas that may be higher risk or more significant, allowing the auditor to focus their attention and testing on those specific groups rather than testing every single transaction or component. As a result, the sample size can be reduced, saving time and resources while still providing adequate evidence to support the audit conclusion.

What Is One of the Primary Benefits of Stratifying a Population