An advantage of using statistical sampling techniques is that such techniques:
A) Mathematically measure risk.
B) Eliminate the need for judgmental decisions.
C) Define the values of allowance for sampling risk and tolerable misstatement required to provide audit satisfaction.
D) Have been established in the courts to be superior to judgmental sampling.

Question

Quizplus · Accepted Answer

Statistical sampling techniques mathematically measure risk, which helps auditors to quantify the sampling risk and arrive at the sample size required to provide the desired level of audit assurance. This is an important advantage of statistical sampling techniques. Eliminating the need for judgmental decisions (B) is not entirely accurate as judgmental decisions are still involved in selecting the appropriate statistical technique and the sample size. While statistical sampling helps define the values of allowance for sampling risk and tolerable misstatement required to provide audit satisfaction (C), it does not define them. Rather, the auditor must determine these values based on professional judgment. Lastly, (D) is incorrect as there is no legal requirement to use statistical sampling techniques in audits, and the courts do not have a preference for either statistical or judgmental sampling.

An Advantage of Using Statistical Sampling Techniques Is That Such