Sarah Jones, an auditor, believes the industry-wide occurrence rate of client billing errors is three per cent and has established a tolerable deviation rate of five per cent. In the review of client invoices to test that the invoice is properly checked and authorised, Jones should use:
A) attribute sampling.
B) discovery sampling.
C) variable sampling.
D) stratified sampling.

Question

Quizplus · Accepted Answer

Attribute sampling is most appropriate for testing the occurrence of a particular characteristic, in this case, client billing errors. Since Jones has established a tolerable deviation rate of five per cent, she can use attribute sampling to determine if the error rate is within the acceptable range. Discovery sampling is used when the auditor suspects a higher error rate than the industry-wide rate, variable sampling is used to determine the relationship between the value of the sample and the population, and stratified sampling is used when the population can be divided into homogeneous subgroups.

Sarah Jones, an Auditor, Believes the Industry-Wide Occurrence Rate of Client