D is corrent because statistical sampling may be applied when testing controls which leave an audit trail in the form of documentary evidence. Documentary evidence in the form of audit stamps, initials, calculations, etc., lends itself to tests of controls where the auditor’s objective is to determine the rate of compliance with the prescribed control.
A is incorrect because the fact that the client’s control activities are included in client accounting manuals has no direct impact on the use of statistical sampling.
B is incorrect because statistical sampling is generally not applicable to controls which depend primarily on the segregation of duties.
C is incorrect because whether the controls enable detection of material irregularities is irrelevant to the applicability of statistical sampling. The structure of internal control is expected to prevent or detect material irregularities from entering the accounting records.
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