CAF-8 · Chapter 4 · Question 4 of 10
To improve audit efficiency, an auditor divides the trade receivables population into three groups based on balance sizes (High, Medium, Low) before sampling. What is this technique called?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Stratification
Explanation
Stratification is the process of dividing a population into sub-populations (strata) with similar characteristics, allowing the auditor to focus effort on higher-risk or higher-value items.
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