1.
When statistical sampling methods are used by the client in determining inventories, professional
standards require that the auditor ascertain the following EXCEPT that the:
appropriate tests of transactions have been applied.
sampling plan has statistical validity.
results in terms of reliability are reasonable.
sampling plan has been properly applied.
Solution
Solution-
appropriate tests of transactions have been applied
Explanation-
Unexpected difference before talking to management (client) identifies the explanation which
help the auditor in assess. If the explanation is reasonable by management, other evidence and
explanation of management always corroborated.