Alicia Wong, an auditor, is planning confirmation of accounts receivable. There are 500 customer balances and based on the condition of the accounting records and her past experience with the client, she plans to send 50 confirmation requests to customers she selected from the aged trial balance of accounts receivable. Alicia plans to evaluate confirmation responses qualitatively and by multiplying the average error in the 50 responses by 500. This audit approach may be described most precisely as:
A) statistical sampling.
B) exception reporting.
C) non-statistical sampling.
D) None of the given answers.

Question

Quizplus · Accepted Answer

This audit approach is non-statistical sampling because Alicia is not using a random selection process to choose which customers to send confirmation requests to. Instead, she is selecting customers based on her own judgment and experience with the client. Additionally, her evaluation of the responses is qualitative rather than quantitative, which further supports the use of a non-statistical sampling approach.

Alicia Wong, an Auditor, Is Planning Confirmation of Accounts Receivable