Which of the following statements is true?
A) Monetary unit sampling is more likely to pull accounts with small balances.
B) Monetary unit sampling allows auditors to evaluate account balances.
C) Prescriptive analytics attempts to find hidden patterns or variables.
D) Predictive analytics uses machine learning and artificial intelligence.

Question

Quizplus · Accepted Answer

Monetary unit sampling is a statistical sampling method that involves selecting individual monetary units from a population of monetary units for audit testing. This method allows auditors to evaluate account balances because the sampling unit is a monetary unit, such as a dollar, rather than a transaction or account. Option A is incorrect because monetary unit sampling is not more likely to pull accounts with small balances; in fact, larger balances have a higher probability of selection. Option C is incorrect because prescriptive analytics attempts to provide recommendations or prescriptions for future decisions, while option D is incorrect because predictive analytics involves using data, statistical algorithms, and machine learning to identify the likelihood of future outcomes based on historical data.

Which of the Following Statements Is True