Assertion (A): Audit sampling involves applying audit procedures to less than 100% of items within a population. Reason (R): Audit sampling eliminates the risk of drawing a false conclusion about the entire population. Choose the correct option. MCQ with Answer and Explanation

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Assertion (A): Audit sampling involves applying audit procedures to less than 100% of items within a population. Reason (R): Audit sampling eliminates the risk of drawing a false conclusion about the entire population. Choose the correct option.

A. Both A and R are true and R is the correct explanation of A

B. A is true but R is false

C. A is false but R is true

D. Both A and R are true but R is NOT the correct explanation of A

Answer: Option B

Solution (By JKExamLibrary)

A is true as per SA 530. R is false because audit sampling inherently carries sampling risk, meaning it cannot completely eliminate the risk of drawing a false conclusion.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Which of the following is NOT one of the 5 heads of income under the Income Tax Act?

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