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Maam can you explain why the answer to this question is FALSE?
Statistical sampling methods are more reliable than non-statistical methods.
Source: Kaplan study text Ch 7 evidence
Also this one too ma’am -why is the answer to this one FALSE?:
“The auditor must always use stratification to ensure a representative sample is tested”
Source: Kaplan study text Ch 7 evidence
ISA 530 says nothing about the relative reliability of selection methods – as a concept, reliability is an aspect of the quality of audit evidence obtained.
Consider for example – using monetary unit sampling on a list of trade receivables balances, the sample includes the 10 largest receivables balances for external confirmation (as well as others). The auditor could have chosen “judgmentally” to select the 20 largest balances. “Reliability” simply doesn’t come into a comparison of the two methods.
When an option includes “always” or “never” you only have to think of one exception to show it to be false. So, for example, stratification can only be applied when the population has layers/bands of monetary amounts. So what if the population is Goods Received Notes? It’s simply not possible to stratify. Also – consider MUS – as illustrated in s.4. of Chapter 11 of the notes – the population of invoice values hasn’t be stratified – but still a representative sample will be obtained.
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