Step-by-Step Detailed Explanation:
A . The decision affects the test procedures performed:
Correct. The choice between statistical and nonstatistical sampling affects the design of the sample selection, execution of audit procedures, and the nature of conclusions drawn. Statistical sampling involves probabilistic techniques that influence sample size and evaluation, whereas nonstatistical sampling relies on auditor judgment.
B . The auditor's response to errors detected will be influenced:
While error response is critical, it is influenced more by the nature and materiality of the errors than by the sampling approach.
C . The competence of the evidence obtained is greater with statistical sampling:
This is incorrect because the competence of evidence depends on the procedure itself, not the sampling method used. Both methods can yield competent evidence if applied correctly.
D . Nonstatistical sampling may be more cost effective:
While this can sometimes be true, it is context-dependent and not universally applicable, so it is not the best answer.
CIA Exam Syllabus Reference:
Domain II: Risk Management and Control - Sampling Techniques and Audit Evidence.