ExpertMedium1 markMultiple Choice
CPA · Question 34 · Area 3: Performing Procedures
Which of the following situations would most likely require the auditor to use 'Variables Sampling' rather than 'Attribute Sampling'?
Which of the following situations would most likely require the auditor to use 'Variables Sampling' rather than 'Attribute Sampling'?
Answer options:
A.
The auditor wants to estimate the rate of deviations from a prescribed control procedure.
B.
The auditor wants to determine if purchase orders are properly authorized.
C.
The auditor wants to estimate the total dollar value of misstatement in the inventory account.
D.
The auditor wants to determine if checks are signed by authorized personnel.
How to approach this question
Attribute = Rate (Controls). Variables = Value (Dollars/Substantive).
Full Answer
C.The auditor wants to estimate the total dollar value of misstatement in the inventory account.✓ Correct
Variables sampling is used in substantive testing to estimate the dollar amount of a population or the amount of misstatement. Attribute sampling is used in tests of controls to estimate the rate of deviation.
Common mistakes
Using attribute sampling for substantive dollar value tests.
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