Audit sampling would be an appropriate method to use on which one of the following procedures in an audit program?
A) Review the aged schedule of accounts receivable to determine if receivables from officers are included.
B) Review sales transactions for large and unreasonable amounts.
C) Examine a sample of duplicate sales invoices for credit approval by the credit manager.
D) Observe whether the duties of the accounts receivable clerk are separate from handling cash.

Question

Quizplus · Accepted Answer

Audit sampling is a method of selecting a representative sample of transactions to evaluate them for accurate representation of the population. Examining a sample of duplicate sales invoices for credit approval by the credit manager is a transaction-based procedure that involves testing the accuracy and completeness of the recorded transactions. Therefore, it is appropriate to use audit sampling to determine if the credit approval process is adequate. Option A involves a simple check of an account balance and does not require sampling. Option B involves testing for specific attributes that are not necessarily associated with a sample. Option D involves testing internal controls and would not typically involve audit sampling.

Audit Sampling Would Be an Appropriate Method to Use on Which