Most Effective Audit Sampling Method for Suspected Unauthorized Credits?
A financial institution suspects that a manager has been crediting customer accounts without authorization. Which of the following is the MOST effective method to validate this concern?
Community Votes
67% of anonymous learners picked answer B. Votes are pick records left by other test-takers — they are not the verified answer.
Community Insight
Tests knowledge of specialized audit sampling techniques, with the common trap being confusion between discovery sampling and variable or stop-or-go methods used for different audit objectives.
Discovery sampling is specifically engineered to detect rare but critical deviations like fraud or unauthorized transactions. Community consensus strongly confirms it as the most effective audit sampling technique for validating suspected account irregularities.
Stop-or-go sampling is frequently chosen because it allows early termination of testing, but it is designed for assessing control risk rather than detecting specific instances of fraud or unauthorized credits.
Community Discussion (4 comments)
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Expert Analysis
Why the Answer Is Correct
Discovery sampling is explicitly calculated to determine whether at least one instance of a critical deviation exists within an audited population. When auditors suspect fraud or unauthorized activity, this method ensures the sample size provides a high probability of uncovering at least one occurrence if the error rate meets a predetermined threshold. As highlighted in the top community feedback, discovery sampling remains the industry-standard approach for fraud detection scenarios.Why the Other Options Are Wrong
Variable sampling focuses on quantifying monetary misstatements in financial statements rather than confirming binary fraud occurrences. Stop-or-go sampling is an attribute sampling variant optimized for quickly verifying that internal controls operate effectively, not for substantiating hidden irregularities. Haphazard sampling lacks statistical rigor and cannot provide the measurable assurance required to validate serious allegations of unauthorized account credits.Community Comment Notes
Multiple highly-rated comments emphasize that discovery sampling is purpose-built for identifying fraud and operational irregularities. Users consistently highlight its direct application in situations where auditors suspect unauthorized activities but lack initial evidence. The single dissenting vote for stop-or-go sampling overlooks the fundamental difference between routine control verification and substantive fraud detection.Official Reference
Exam Strategy
Match the audit objective directly to the sampling type: use discovery sampling whenever the goal is to prove the existence of a rare event like fraud, and reserve variable sampling for measuring dollar-value inaccuracies. Always eliminate non-statistical methods like haphazard sampling when regulatory validation is required.
Frequently Asked Questions
Why not use variable sampling for unauthorized credits?
Variable sampling measures monetary misstatement amounts, not binary fraud occurrences. Discovery sampling is required when the audit objective is simply proving an irregularity exists.
How does discovery sampling differ from stop-or-go sampling?
Stop-or-go sampling quickly verifies control effectiveness and halts testing early. Discovery sampling calculates larger samples specifically to guarantee detection of rare fraud events.
Related Analysis
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