54 Which of the following would be the most likely situation

54. Which of the following would be the most likely situation in which an auditor would use variables sampling?

Choices:

Comparing the recorded balance in accounts receivable to expected balances or prior-years\' balances.

Selecting customer balances in accounts receivable for confirmation.

Evaluating sales invoices for evidence of authorization by client personnel.

Mathematically evaluating the client\'s provision for the allowance for doubtful accounts

Solution

Answer:

Selecting customer balances in accounts receivable for confirmation.

Variable sampling is used to estimate the amount of some characteristic of a population.It used as the auditor\'s substantative procedures.The goal is to estimate the amount of misstatement in an account balance or class of transactions and compare to an allowable level.