Question

In order to determine the extent of testing of controls, _______.

A. the auditor should inquire of management as to their preferences
B. the auditor can use statistically based sampling techniques only
C. the auditor can use either statistically based sampling techniques or nonstatistical techniques
D. the auditor can use non nonstatistical techniques only

Answer 1

The correct option to complete the sentence is C. the auditor can use either statistically based sampling techniques or nonstatistical techniques.

Step-by-step explanation:

The correct option to complete the sentence is C. the auditor can use either statistically based sampling techniques or nonstatistical techniques.

When determining the extent of testing of controls, auditors have the flexibility to use either statistically based sampling techniques or nonstatistical techniques. Statistically based sampling techniques involve selecting a sample based on statistical principles, such as random sampling or stratified sampling. Nonstatistical techniques, on the other hand, do not involve the use of statistical principles. Instead, auditors may use their professional judgment to select a sample that they believe is representative of the population.

For example, in a retail store, the auditor may choose to observe a sample of cash register transactions to test the effectiveness of the store's cash handling controls. This could involve selecting a random sample of transactions using statistical techniques, or a nonstatistical technique such as selecting transactions during different times of the day to obtain a representative sample.

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