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CMA Intermediate · Corporate Accounting and Auditing · Audit Sampling, Audit Techniques and Analytical Procedure

As per SA 530 Audit Sampling, which of the following is a valid basis for deciding between a statistical and a non-statistical sampling approach?

The choice between statistical and non-statistical sampling is a matter of the auditor's professional judgment. SA 530 expressly says that sample size is not a valid criterion for distinguishing the two approaches, so neither large samples nor small populations decide it, and management does not dictate it.

  1. AStatistical sampling is used only when the sample size is large
  2. BThe auditor's judgment, since sample size is not a valid criterion to distinguish the two approachesCorrect
  3. CNon-statistical sampling is used only when the population is small
  4. DThe choice is dictated by the client's management

Explanation

SA 530 states that the decision to use a statistical or non-statistical approach is a matter for the auditor's judgment. It adds that sample size is not a valid criterion to distinguish between the two approaches. The options linking the choice to sample size, population size or management are therefore wrong.

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