Which of the following courses of action would an audit team most likelyfollow in planning a sample of cash disbursements if the audit team is aware of several unusually large cash disbursements?a. Increase the sample size to reduce the effect of the unusually large disbursements.b. Continue to draw new samples until all unusually large disbursements appear in the sample.c. Set the tolerable deviation rate at a lower level than originally planned.d. Stratify the cash disbursements population so that the unusually large disbursements are selected.
Which of the following courses of action would an audit team most likelyfollow in planning a sample of cash disbursements if the audit team is aware of several unusually large cash disbursements?a. Increase the sample size to reduce the effect of the unusually large disbursements.b. Continue to draw new samples until all unusually large disbursements appear in the sample.c. Set the tolerable deviation rate at a lower level than originally planned.d. Stratify the cash disbursements population so that the unusually large disbursements are selected.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Which of the following courses of action would an audit team most likely
follow in planning a sample of cash disbursements if the audit team is aware of several unusually large cash disbursements?
a. Increase the sample size to reduce the effect of the unusually large disbursements.
b. Continue to draw new samples until all unusually large disbursements appear in the sample.
c. Set the tolerable deviation rate at a lower level than originally planned.
d. Stratify the cash disbursements population so that the unusually large disbursements are selected.
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