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Assume an auditor separates the population of accounts receivable into three groups: 1) all receivables with balances over $50,000, 2) receivables with balances between $15,000
Assume an auditor separates the population of accounts receivable into three groups: 1) all receivables with balances over $50,000, 2) receivables with balances between $15,000 and $50,000, and 3) all receivables less than $15,000.
All receivables over $50,000 are audited, and the auditor selects a sample of 15% of the 2nd group and 5% of the third group to be audited. Which of the following statements does NOT describe this situation?
- A)The auditor is employing systematic selection.:
- B)The second and third groups are less homogeneous as a result of the groupings.
- C)The auditor can draw a conclusion with certainty about the first group.
- D)The process makes the audit more efficient.
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