In an audit sampling application,an auditor
A) Performs procedures on all items in a balance and makes a conclusion about the entire balance
B) Performs procedures on less than 100 percent of the items in a balance and formulates a conclusion about the entire balance
C) Performs procedures on less than 100 percent of the items in a class of transactions to become familiar with the client's accounting system.
D) Performs analytical procedures on the client's unaudited financial statements when planning the audit.

Question

Quizplus · Accepted Answer

In an audit sampling application, the auditor performs procedures on less than 100 percent of the items in a balance and formulates a conclusion about the entire balance. This allows the auditor to draw conclusions about the entire population while minimizing the sample size and reducing the cost of the audit. Option A is incorrect because it is not feasible for the auditor to perform procedures on all items in a balance due to time and cost constraints. Option C is incorrect because the purpose of sampling is to draw conclusions about the entire population, not just to become familiar with the client's accounting system. Option D is incorrect because analytical procedures are used as a substantive testing procedure during the planning and completion phases of the audit, not during sampling.

In an Audit Sampling Application,an Auditor