AICPA CPA-Auditing Exam - Topic 2 Question 63 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 63
Topic #: 2

When using classical variables sampling for estimation, an auditor normally evaluates the sampling results by calculating the possible error in either direction. This statistical concept is known as:

APrecision.

BReliability.

CProjected error.

DStandard deviation.

Show Suggested Answer

Suggested Answer: A

Choice 'a' is correct. The statistical concept of precision is used to describe the auditor's evaluation of sampling results by calculating the possible error in either direction.

Choice 'b' is incorrect. Reliability measures how frequently the procedure used will yield differences between the estimated value and the population value.

Choice 'c' is incorrect. Projected error is the auditor's best estimate of the error in the total population based upon evaluating the actual error rate in the sample results. The auditor then adds an allowance for sampling risk to develop a 'precision interval' within which the population is expected to fall.

Choice 'd' is incorrect. Standard deviation is a measure of the variability of a frequency distribution about its mean.

by Lashandra at Dec 26, 2022, 12:26 AM

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Lamar

4 months ago

Standard deviation? Nah, that's not it.

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Nidia

4 months ago

Projected error seems more accurate to me.

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Latrice

4 months ago

Wait, is it really Precision? That sounds off.

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Latonia

4 months ago

I thought it was Reliability, but I guess not.

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Dick

4 months ago

It's definitely Precision!

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Buddy

5 months ago

I keep mixing up "Standard deviation" with other concepts. I don't think it's the right choice here, but it does relate to variability in data.

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Ronny

5 months ago

I feel like "Projected error" could be the answer since it deals with estimating the potential error in sampling.

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Glory

5 months ago

I'm not entirely sure, but I remember something about "Reliability" being more about the trustworthiness of the results rather than the error calculation.

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Dean

5 months ago

I think the term we're looking for is "Precision." It relates to how close our estimates are to the true value, right?

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Kattie

5 months ago

Okay, let's see. We need SSL offloading, so I'm thinking the clientssl profile is a must. And we need persistence, so that narrows it down to a few options.

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Virgie

5 months ago

Ah, I see now. Since Salesforce is delegating authentication to the LDAP server, the users would need to change their password on the LDAP portal, not in Salesforce itself. Option D is the way to go here.

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Leigha

5 months ago

Hmm, this seems like a tricky one. I'll need to carefully read through the options and think about the implications of each setting.

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