Question 1

What is statistical allowance for sampling risk?

Accepted Answer

A) A measure of the uncertainty associated with not sampling the entire population 
B) A projection of misstatement in the population based on the findings in the sample 
C) A statistical estimate of the maximum misstatement in the population based on the sample 
D) The amount of estimated misstatement in the population 
A) A measure of the uncertainty associated with not sampling the entire population 
B) A projection of misstatement in the population based on the findings in the sample 
C) A statistical estimate of the maximum misstatement in the population based on the sample 
D) The amount of estimated misstatement in the population

Question 2

Which of the following refers to an approach to sampling that involves a random selection of sample items and the use of an appropriate statistical technique to determine sample size and evaluate sample results?

Accepted Answer

A) Statistical sampling 
B) Non-statistical sampling 
C) Haphazard sampling 
D) Audit data sampling 
A) Statistical sampling 
B) Non-statistical sampling 
C) Haphazard sampling 
D) Audit data sampling

Question 3

Non-statistical sampling _______.

Accepted Answer

A) involves any sample selection and evaluation method that does not have the characteristics of statistical sampling. 
B) involves any sample selection and evaluation method that has the characteristics of non-statistical sampling. 
C) may only be used for publicly traded companies with market capitalizations of less than a certain threshold 
D) may only be used for publicly traded companies with market capitalizations above a certain threshold 
A) involves any sample selection and evaluation method that does not have the characteristics of statistical sampling. 
B) involves any sample selection and evaluation method that has the characteristics of non-statistical sampling. 
C) may only be used for publicly traded companies with market capitalizations of less than a certain threshold 
D) may only be used for publicly traded companies with market capitalizations above a certain threshold

Question 4

In the non-statistical sampling method, the sample results are evaluated on the basis of the professional judgment and the auditor's own experience.

Accepted Answer

A) True 
 B)False

Question 5

When creating an audit program and designing audit procedures, _______.

Accepted Answer

A) an auditor also decides how to select appropriate items for testing 
B) an auditor also decides how to select appropriate items for removal from the test sample 
C) the auditors should defer sample selection to the internal auditors 
D) the auditors should consider use of the cheapest statistical selection methods possible, to lower the cost of the audit 
A) an auditor also decides how to select appropriate items for testing 
B) an auditor also decides how to select appropriate items for removal from the test sample 
C) the auditors should defer sample selection to the internal auditors 
D) the auditors should consider use of the cheapest statistical selection methods possible, to lower the cost of the audit

Question 6

_______ is the risk that the sample chosen by the auditor is not representative of the population of transactions or items within an account balance and, as a consequence, the auditor arrives at an inappropriate conclusion.

Accepted Answer

Sampling risk
Sampling risk is the risk

Question 7

When an audit procedure is tested on an entire group of transactions, _______.

Accepted Answer

A) sampling is not required 
B) non-statistical sampling is required 
C) statistical sampling is required 
D) the sample should be discarded, and a new random sample drawn 
A) sampling is not required 
B) non-statistical sampling is required 
C) statistical sampling is required 
D) the sample should be discarded, and a new random sample drawn

Question 8

Audit sampling can be used for all substantive tests.

Accepted Answer

A) True 
 B)False

Question 9

Whenever the auditor draws a conclusion about the entire population based on a sample, there is some level of uncertainty about the auditor's conclusion.

Accepted Answer

A) True 
 B)False

Question 10

When sampling, the risk always exists _______.

Accepted Answer

A) that the auditor's conclusion based on the sample may be different than the conclusion drawn if the auditor had audited the entire population. 
B) that the auditor's conclusion based on the sample may be the same as the conclusion drawn if the auditor had audited the entire population. 
C) that audit fees may be lowered as a result of auditing a sample 
D) that management may request a new sample 
A) that the auditor's conclusion based on the sample may be different than the conclusion drawn if the auditor had audited the entire population. 
B) that the auditor's conclusion based on the sample may be the same as the conclusion drawn if the auditor had audited the entire population. 
C) that audit fees may be lowered as a result of auditing a sample 
D) that management may request a new sample

Question 11

_______ is generally easier to use than classical variables sampling because the auditor can calculate sample sizes and evaluate sample results by hand or with the assistance of tables.

Accepted Answer

PPS Sampling / Probability Proportionate

Question 12

The major advantages of non-statistical sampling include _______.

Accepted Answer

A) decreased complexity 
B) lower training costs 
C) it is less time consuming 
D) All of these answer choices are correct. 
A) decreased complexity 
B) lower training costs 
C) it is less time consuming 
D) All of these answer choices are correct.

Question 13

A representative audit sample _______.

Accepted Answer

A) is likely to provide a reasonable basis for drawing a conclusion about an entire population 
B) is unlikely to provide a reasonable basis for drawing a conclusion about an entire population 
C) should be agreed upon by management and the auditor 
D) should not involve the auditor 
A) is likely to provide a reasonable basis for drawing a conclusion about an entire population 
B) is unlikely to provide a reasonable basis for drawing a conclusion about an entire population 
C) should be agreed upon by management and the auditor 
D) should not involve the auditor

Question 14

In which of the following circumstances must an auditor decide how best to select a sample that is representative of the entire population of items?

Accepted Answer

A) There are numerous transactions or items within an account balance. 
B) An audit population is sufficiently small. 
C) A client has a large balance of notes payable and the notes payable are with several banks. 
D) There are few transactions or few items within an account balance. 
A) There are numerous transactions or items within an account balance. 
B) An audit population is sufficiently small. 
C) A client has a large balance of notes payable and the notes payable are with several banks. 
D) There are few transactions or few items within an account balance.

Question 15

_______ is an approach to sampling that involves a random selection of sample items and the use of an appropriate statistical technique to determine sample size and evaluate sample results, including measurement of sampling risk.

Accepted Answer

Statistical Sampling | statistical sampl

Question 16

The auditor's conclusion based on the sample _______.

Accepted Answer

A) should always be applied to the sample only and not the population 
B) should always be applied to the population only and not the sample 
C) may be different than the conclusion drawn if the auditor had audited the entire population 
D) will always be the same as the conclusion drawn if the auditor had audited the entire population 
A) should always be applied to the sample only and not the population 
B) should always be applied to the population only and not the sample 
C) may be different than the conclusion drawn if the auditor had audited the entire population 
D) will always be the same as the conclusion drawn if the auditor had audited the entire population

Question 17

It is common to use audit sampling when performing substantive tests on a population of transactions or account balances, such as taking a sample of total sales or a sample of total receivable balances.

Accepted Answer

A) True 
 B)False

Question 18

The auditor is more likely to use audit sampling _______.

Accepted Answer

A) when internal controls are weak 
B) when internal controls are strong 
C) when the audit committee requests the auditor do so 
D) if the client agrees to pay extra fees associated with this procedure 
A) when internal controls are weak 
B) when internal controls are strong 
C) when the audit committee requests the auditor do so 
D) if the client agrees to pay extra fees associated with this procedure

Question 19

An important aspect of selecting a sample _______.

Accepted Answer

A) involves determining the population and sampling unit 
B) involves determining the sample and sampling unit 
C) involves conferring with senior management with respect to their sampling preferences 
D) involves being as subjective as possible 
A) involves determining the population and sampling unit 
B) involves determining the sample and sampling unit 
C) involves conferring with senior management with respect to their sampling preferences 
D) involves being as subjective as possible

Question 20

What is tolerable misstatement?

Accepted Answer

A) The maximum dollar amount of misstatement that an auditor is willing to accept in a transaction class or an account balance. 
B) The amount of misstatement the auditor expects in a transaction class or account balance. 
C) The level of assurance that the sample is representative of the population. 
D) A high level of assurance leading to a lower level of sampling risk. 
A) The maximum dollar amount of misstatement that an auditor is willing to accept in a transaction class or an account balance. 
B) The amount of misstatement the auditor expects in a transaction class or account balance. 
C) The level of assurance that the sample is representative of the population. 
D) A high level of assurance leading to a lower level of sampling risk.

What is statistical allowance for sampling risk?

Which of the following refers to an approach to sampling that involves a random selection of sample items and the use of an appropriate statistical technique to determine sample size and evaluate sample results?

Non-statistical sampling _______.

In the non-statistical sampling method, the sample results are evaluated on the basis of the professional judgment and the auditor's own experience.

When creating an audit program and designing audit procedures, _______.

_______ is the risk that the sample chosen by the auditor is not representative of the population of transactions or items within an account balance and, as a consequence, the auditor arrives at an inappropriate conclusion.

When an audit procedure is tested on an entire group of transactions, _______.

Audit sampling can be used for all substantive tests.

Whenever the auditor draws a conclusion about the entire population based on a sample, there is some level of uncertainty about the auditor's conclusion.

When sampling, the risk always exists _______.

_______ is generally easier to use than classical variables sampling because the auditor can calculate sample sizes and evaluate sample results by hand or with the assistance of tables.

The major advantages of non-statistical sampling include _______.

A representative audit sample _______.

In which of the following circumstances must an auditor decide how best to select a sample that is representative of the entire population of items?

_______ is an approach to sampling that involves a random selection of sample items and the use of an appropriate statistical technique to determine sample size and evaluate sample results, including measurement of sampling risk.

The auditor's conclusion based on the sample _______.

It is common to use audit sampling when performing substantive tests on a population of transactions or account balances, such as taking a sample of total sales or a sample of total receivable balances.

The auditor is more likely to use audit sampling _______.

An important aspect of selecting a sample _______.

What is tolerable misstatement?

Introduction and Overview of Audit and Assurance

Professionalism, Ethics and Legal Liability

Risk Assessment Part Iaudit Risk and Audit Strategy

Risk Assessment Part Iiunderstanding the Client

Audit Evidence

Understanding of the Clients System of Internal Controls

Data Analyticsoverview and Application

Risk Responseperforming Tests of Controls

Risk Responseperforming Substantive Procedures

Auditing the Revenue Cycle

Auditing the Purchases Cycle and Payroll Cycle

Auditing Cash, Inventory, Investing and Financing Activities

Completing the Audit

Reporting on the Audit

Filters

Exam 10: Risk Responseaudit Sampling for Substantive Testing

What is statistical allowance for sampling risk?

Which of the following refers to an approach to sampling that involves a random selection of sample items and the use of an appropriate statistical technique to determine sample size and evaluate sample results?

Non-statistical sampling _______.

In the non-statistical sampling method, the sample results are evaluated on the basis of the professional judgment and the auditor's own experience.

When creating an audit program and designing audit procedures, _______.

_______ is the risk that the sample chosen by the auditor is not representative of the population of transactions or items within an account balance and, as a consequence, the auditor arrives at an inappropriate conclusion.

When an audit procedure is tested on an entire group of transactions, _______.

Audit sampling can be used for all substantive tests.

Whenever the auditor draws a conclusion about the entire population based on a sample, there is some level of uncertainty about the auditor's conclusion.

When sampling, the risk always exists _______.

_______ is generally easier to use than classical variables sampling because the auditor can calculate sample sizes and evaluate sample results by hand or with the assistance of tables.

The major advantages of non-statistical sampling include _______.

A representative audit sample _______.

In which of the following circumstances must an auditor decide how best to select a sample that is representative of the entire population of items?

_______ is an approach to sampling that involves a random selection of sample items and the use of an appropriate statistical technique to determine sample size and evaluate sample results, including measurement of sampling risk.

The auditor's conclusion based on the sample _______.

It is common to use audit sampling when performing substantive tests on a population of transactions or account balances, such as taking a sample of total sales or a sample of total receivable balances.

The auditor is more likely to use audit sampling _______.

An important aspect of selecting a sample _______.

What is tolerable misstatement?

Introduction and Overview of Audit and Assurance

Professionalism, Ethics and Legal Liability

Risk Assessment Part Iaudit Risk and Audit Strategy

Risk Assessment Part Iiunderstanding the Client

Audit Evidence

Understanding of the Clients System of Internal Controls

Data Analyticsoverview and Application

Risk Responseperforming Tests of Controls

Risk Responseperforming Substantive Procedures

Auditing the Revenue Cycle

Auditing the Purchases Cycle and Payroll Cycle

Auditing Cash, Inventory, Investing and Financing Activities

Completing the Audit

Reporting on the Audit

Filters