Which of the following observations about discovery sampling is accurate?
A) Discovery sampling is one of the more difficult statistical sampling variations to understand.
B) After using discovery sampling, auditors can be certain that fraud does not exist in a population of checks.
C) Discovery sampling allows an auditor to generalize and make inferences from the population to the sample.
D) Auditors can quantify both the risk and samples until they have sufficient evidence that fraud does not likely exist.

Question

Quizplus · Accepted Answer

Discovery sampling is a risk assessment procedure used to identify areas of potential fraud or error, rather than to provide assurance that fraud or error does not exist in a population. Auditors must quantify the risk of material misstatement and design a sample size that is sufficient to provide reasonable assurance that potential fraud or error is not likely to exist. Therefore, D is the only accurate observation about discovery sampling.

Which of the Following Observations About Discovery Sampling Is Accurate