Final answer:
The nature of an audit procedure relates to its purpose and type, addressing the accuracy of a company's financial information. Calculations involving the probability of audits over time can be done using binomial probability formulas.
Step-by-step explanation:
The nature of an audit procedure refers to its purpose, which is to test the financial information given by the entity to determine if it is accurate and free from material misstatement, and its type, which includes tests of controls and substantive procedures. This audit procedure definition is a concept covered in accounting and auditing courses, typically at the college level.
To address the hypothetical questions: If audits are equally likely to occur in any given year, the number of audits expected in a 20-year period would depend on the likelihood or rate of audits per year. The probability that a person is not audited at all can be calculated using the binomial probability formula, where the number of successes (audits) is zero. Similarly, finding the probability that a person is audited more than twice also involves the binomial probability distribution, where the number of successes is greater than two.