C is corrent because statistical sampling accounting applications are either based on variables sampling or attribute sampling. Variables sampling is measurement of a continuous variable (i.e., a variable such as number of items in inventory or amount of accounts receivable). The variable being estimated can take on a continuum of values (e.g., zero to infinity). Variable sampling is based upon the normal distribution. Attribute sampling is based on the binomial distribution and sample items must be binary in nature (i.e., right or wrong, correct or incorrect, etc.) Attribute sampling is most applicable to tests of compliance and variables sampling is most applicable to substantive tests.
A is incorrect because while the terms are correct, they are in the wrong order.
B is incorrect because constants has no definite meaning here.
D is incorrect because constants has no definite meaning here.
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