When errors are found, a common assumption in practice is to assume:
A) a 100% assumption for all errors.
B) that the population errors are smaller than the sample errors.
C) that the population errors are larger than the sample errors.
D) that misstatements in the unaudited population are proportional to the misstatements in the sample.

Question

Quizplus · Accepted Answer

This assumption is known as the proportional-to-size assumption, where the misstatements in the sample are assumed to be proportional to the misstatements in the entire population. This assumption is commonly used in audit sampling to estimate the total misstatement in the population based on sample results.

When Errors Are Found, a Common Assumption in Practice Is