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Which of the following most likely would be an advantage in using classical variables sampling rather than probability-proportional-to-size (PPS) sampling?
Suggested Answer: D
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Choice 'd' is correct. When obtaining an understanding of an entity's internal control in a financial statement audit, an auditor is not obligated to search for significant deficiencies in the operation of internal control.
Choice 'a' is incorrect. In order to determine the nature, timing and extent of tests to be performed, an auditor must determine whether the control activities have been implemented.
Choice 'b' is incorrect. An auditor is required to perform procedures to confirm his/her understanding of the internal control systems' design, and to determine whether relevant controls have been implemented.
Choice 'c' is incorrect. An auditor is required to document his or her understanding of the entity's internal control components, even if he or she intends to use a substantive approach.
39 comments · newest first
CA
Caprice
10 months ago
D sounds right, significant amounts get picked easily.
EL
Elvis
11 months ago
B seems a bit off, computers help a lot with sampling!
VI
Virgie
11 months ago
Wait, are we sure about C? Zero balances can be tricky.
AM
Amalia
11 months ago
I agree, A makes sampling simpler.
TY
Tyra
11 months ago
A is definitely true, no need for standard deviation!
LE
Leonor
12 months ago
I feel like option D is a strong contender since it mentions significant amounts being automatically selected, which seems like a clear advantage.
VA
Valene
12 months ago
I'm a bit confused about option B. I thought both methods could require computer assistance, but maybe classical is simpler?
EU
Eugene
12 months ago
I remember practicing a question similar to this, and I think option C makes sense since zero and negative balances can complicate PPS sampling.
KR
Kristal
1 year ago
I think option A might be correct because classical variables sampling doesn't need the standard deviation estimate, but I'm not entirely sure.
VE
Verlene
1 year ago
This is a tricky one. I'm not super familiar with the details of these sampling methods, so I'll have to rely on my general understanding of their differences. I'll try to reason through the options and see if I can identify the most likely advantage.
SA
Santos
1 year ago
Okay, let's see. The first option mentions that an estimate of the population's standard deviation is not required for classical variables sampling. That could be an advantage if you don't have that information readily available. The other options also seem to point to classical variables sampling being more straightforward to implement. I think I have a strategy here.
BR
Britt
1 year ago
Hmm, I'm a bit unsure about this one. The options seem to be highlighting specific differences, but I'm not totally confident in my understanding of how those differences would translate to advantages. I'll have to think this through carefully.
RO
Rodolfo
1 year ago
This question is asking about the advantages of using classical variables sampling over PPS sampling. I think I know the key differences between the two methods, so I'll try to apply that knowledge here.
JA
Jacklyn
1 year ago
Option B? More like 'Beware of the computer program' am I right? Stay analog, my friends!
MA
Malcom
1 year ago
C) Inclusion of zero and negative balances generally does not require special design considerations.
VI
Virgina
1 year ago
B) The auditor rarely needs the assistance of a computer program to design an efficient sample.
MA
Maryann
1 year ago
C) Inclusion of zero and negative balances generally does not require special design considerations.
LO
Lorita
1 year ago
A) An estimate of the standard deviation of the population's recorded amounts is not required.
MA
Mable
1 year ago
Option A looks good to me. Avoiding the need for population standard deviation estimates is a real win.
TE
Telma
1 year ago
Option D is the way to go! Automatically identifying significant amounts is a game-changer.
JO
Jolene
1 year ago
Marvel: True, not needing to estimate the standard deviation is definitely a plus.
MA
Marvel
1 year ago
User 2: But what about the other advantages of classical variables sampling?
MI
Mireya
1 year ago
User 1: I agree, option D makes the process much easier.
JO
Jolanda
1 year ago
I'm leaning towards Option C. Not having to worry about zero and negative balances is a real time-saver.
HO
Horace
1 year ago
User 4: I think both Option C and Option A have their own advantages, it just depends on the specific situation.
CH
Chi
1 year ago
User 3: True, not having to estimate the standard deviation can save a lot of time and effort.
LE
Leonard
1 year ago
True, but not needing to estimate the standard deviation of the population's recorded amounts is a big advantage as well.
RY
Ryann
1 year ago
But wouldn't it be more efficient to automatically identify and select any individually significant amounts?
CA
Carri
1 year ago
User 2: Option C does sound convenient, but I think not needing the standard deviation is also a big advantage.
LA
Lavonna
1 year ago
I agree, not having to worry about zero and negative balances definitely simplifies the process.
NA
Natalie
1 year ago
User 1: I agree, not having to worry about zero and negative balances is definitely a plus.
DE
Delisa
1 year ago
But with PPS sampling, we can automatically identify individually significant amounts.
CL
Clay
2 years ago
I agree, with classical variables sampling we don't need to estimate the standard deviation.
VE
Veronica
2 years ago
Option B sounds great! Avoiding the hassle of a computer program is a huge plus in my book.
GO
Goldie
1 year ago
User 4: It's definitely a convenient option to consider.
JU
Jutta
1 year ago
User 3: I prefer classical variables sampling for that reason.
AR
Arlette
1 year ago
User 2: Yeah, it saves a lot of time and effort.
JO
Josephine
1 year ago
User 1: I agree, not needing a computer program is definitely a benefit.
MA
Major
2 years ago
I think using classical variables sampling would be easier than PPS sampling.