When using a statistical sampling plan, the auditor calculates a precision interval around the population estimate. This involves:
A) setting the tolerable misstatement amount.
B) differentiating between known and estimated misstatements.
C) determining the amount of the adjustment.
D) All of the above.

Question

Quizplus · Accepted Answer

The precision interval around the population estimate is calculated based on the tolerable misstatement amount determined by the auditor. Differentiating between known and estimated misstatements and determining the amount of adjustment are part of the audit process but not directly related to calculating the precision interval.

When Using a Statistical Sampling Plan, the Auditor Calculates a Precision