Question

Auditors who prefer statistical sampling to nonstatistical sampling may do so because statistical sampling helps the auditor ________.

1) measure the sufficiency of the evidential matter obtained.
2) eliminate subjectivity in the evaluation of sampling results.
3) reduce the level of tolerable misstatement to a relatively low amount.
4) minimize the failure to detect a material misstatement due to nonsampling risk.

Answer 1

Auditors prefer statistical sampling over nonstatistical sampling due to its ability to eliminate subjectivity in result evaluations and more reliably infer conclusions about a population from a sample.

Step-by-step explanation:

Auditors who prefer statistical sampling to nonstatistical sampling may do so because statistical sampling helps the auditor eliminate subjectivity in the evaluation of sampling results. While assessing evidence, statistical sampling provides a scientific foundation for making inferences about the entire population, which may increase the reliability of the audit findings.

When sampling, there is a differentiation between sampling errors, which are related to the size or selection of the sample, and nonsampling errors, like those caused by a defective counting device. To lower sampling error, one can increase the sample size or use stratified sampling to ensure all subgroups are adequately represented. The ±3 percent in a sampling error means that the actual statistic is within 3 percent of the reported sample statistic in either direction, for 95% of such samples if the sample is considered representative.