Question 1

Mean per Unit (MPU) Estimation involves _______.

Accepted Answer

A) sampling involving determining an audit value for each item in the sample 
B) complicated statistical regression techniques 
C) complicated non-statistical regression techniques 
D) procedures completed by the client's legal counsel 
A) sampling involving determining an audit value for each item in the sample 
B) complicated statistical regression techniques 
C) complicated non-statistical regression techniques 
D) procedures completed by the client's legal counsel

Question 2

The major disadvantages of non-statistical sampling include _______.

Accepted Answer

A) sampling risk cannot be quantified 
B) sufficiency of evidence cannot be measured 
C) inefficiency 
D) All of these answer choices are correct. 
A) sampling risk cannot be quantified 
B) sufficiency of evidence cannot be measured 
C) inefficiency 
D) All of these answer choices are correct.

Question 3

The optimal number of strata depends on _______.

Accepted Answer

A) a determination by senior management 
B) the pattern of variation in the population values and the additional costs associated with designing, executing, and evaluating each stratified sample 
C) the pattern of variation only 
D) the additional costs associated with designing, executing, and evaluating each stratified sample only 
A) a determination by senior management 
B) the pattern of variation in the population values and the additional costs associated with designing, executing, and evaluating each stratified sample 
C) the pattern of variation only 
D) the additional costs associated with designing, executing, and evaluating each stratified sample only

Question 4

The results of the sample are used to estimate the _______ in the population.

Accepted Answer

A) total projected misstatement 
B) upper misstatement limit 
C) lower misstatement limit 
D) probability proportionate to size 
A) total projected misstatement 
B) upper misstatement limit 
C) lower misstatement limit 
D) probability proportionate to size

Question 5

Which method of selection appears quite similar to random selection?

Accepted Answer

A) Haphazard selection 
B) Systematic selection 
C) Block selection 
D) Selection based on professional judgment 
A) Haphazard selection 
B) Systematic selection 
C) Block selection 
D) Selection based on professional judgment

Question 6

In the given table, match the steps in planning and evaluating the sample on the left with their details on the right.

Accepted Answer

The audit objective is to obtain reasona

Question 7

With regard to statistical sampling, _______.

Accepted Answer

A) sample size is determined subjectively, or quantitatively, using appropriate statistics 
B) sample size is determined objectively, or quantitatively, using appropriate statistics 
C) this function should be outsourced by the auditor to a qualified professional 
D) management should be heavily involved with sample selection 
A) sample size is determined subjectively, or quantitatively, using appropriate statistics 
B) sample size is determined objectively, or quantitatively, using appropriate statistics 
C) this function should be outsourced by the auditor to a qualified professional 
D) management should be heavily involved with sample selection

Question 8

What is a sampling unit?

Accepted Answer

A) A subset of population 
B) A class that is overstated 
C) The class of transactions to be tested 
D) The reciprocal population 
A) A subset of population 
B) A class that is overstated 
C) The class of transactions to be tested 
D) The reciprocal population

Question 9

Risk of incorrect acceptance is defined as _______.

Accepted Answer

A) the risk that the auditor concludes that a material misstatement does not exist when it does exist 
B) the risk that the auditor concludes that a material misstatement does exist when it does exist 
C) the risk that an audit firm incorrectly accepts a client 
D) the risk that an audit firm incorrectly issued an unmodified opinion 
A) the risk that the auditor concludes that a material misstatement does not exist when it does exist 
B) the risk that the auditor concludes that a material misstatement does exist when it does exist 
C) the risk that an audit firm incorrectly accepts a client 
D) the risk that an audit firm incorrectly issued an unmodified opinion

Question 10

Which of the following are the characteristics of random sampling?

Accepted Answer

A) It requires that the person selecting the sample does not influence the choice of items selected. 
B) It is free from bias. 
C) Each item within the population has an equal chance of being selected for testing. 
D) It involves the selection of a sample for testing by dividing the number of items in a population by the sample size. 
A) It requires that the person selecting the sample does not influence the choice of items selected. 
B) It is free from bias. 
C) Each item within the population has an equal chance of being selected for testing. 
D) It involves the selection of a sample for testing by dividing the number of items in a population by the sample size.

Question 11

Applying audit procedures is different for statistical and for non-statistical sampling.

Accepted Answer

A) True 
 B)False

Question 12

The decision to audit an entire population is usually dependent upon _______.

Accepted Answer

A) the assertion and the evidence available to support the assertion 
B) management's express written approval to do so 
C) the associated controls and the evidence available to support them 
D) the auditors budget plan for the audit 
A) the assertion and the evidence available to support the assertion 
B) management's express written approval to do so 
C) the associated controls and the evidence available to support them 
D) the auditors budget plan for the audit

Question 13

Generally speaking, the larger the population, _______.

Accepted Answer

A) the smaller the sample size 
B) the larger the sample size 
C) the less expensive the audit should be 
D) the more help will be required from the internal audit function 
A) the smaller the sample size 
B) the larger the sample size 
C) the less expensive the audit should be 
D) the more help will be required from the internal audit function

Question 14

A popular way to select a sample is _______.

Accepted Answer

A) using random number generators 
B) asking management to select the sample 
C) asking the internal auditors to select a sample 
D) to pick accounts with large balances, on the basis that inherent risk related to these accounts is higher 
A) using random number generators 
B) asking management to select the sample 
C) asking the internal auditors to select a sample 
D) to pick accounts with large balances, on the basis that inherent risk related to these accounts is higher

Question 15

The tolerable misstatement is equal to or more than the materiality level set for the class of transactions or balances being tested.

Accepted Answer

A) True 
 B)False

Question 16

The choice of using audit sampling versus audit data analytics (ADA) is often a matter of _______.

Accepted Answer

A) determining which method management would prefer the auditor use 
B) what is most effective and efficient in determining whether a control is presented fairly, in all material respects 
C) what is most effective and efficient in determining whether an assertion is presented fairly, in all material respects 
D) which method will be more cost efficient for the client 
A) determining which method management would prefer the auditor use 
B) what is most effective and efficient in determining whether a control is presented fairly, in all material respects 
C) what is most effective and efficient in determining whether an assertion is presented fairly, in all material respects 
D) which method will be more cost efficient for the client

Question 17

A reciprocal population is a population that is _______.

Accepted Answer

A) always understated 
B) always overstated 
C) overstated, if the population of interest is overstated (or vice versa) 
D) overstated, if the population of interest is understated (or vice versa) 
A) always understated 
B) always overstated 
C) overstated, if the population of interest is overstated (or vice versa) 
D) overstated, if the population of interest is understated (or vice versa)

Question 18

What is the resulting condition when an audit population is sufficiently small?

Accepted Answer

A) It is feasible to audit the entire population. 
B) It is more efficient to select a sample of population. 
C) Auditing the entire population may not give correct results. 
D) Randomly selecting a sample representative of the entire population would help. 
A) It is feasible to audit the entire population. 
B) It is more efficient to select a sample of population. 
C) Auditing the entire population may not give correct results. 
D) Randomly selecting a sample representative of the entire population would help.

Question 19

What is sampling risk?

Accepted Answer

A) The risk that the auditor's conclusion based on a sample may be different from the conclusion if the entire population were subjected to the same audit procedure. 
B) The risk that the auditor expresses an opinion on the financial statements based on other audits. 
C) The risk that the auditor reaches an erroneous conclusion for any reason not related to sampling risk. 
D) The risk that the auditor concludes that a material misstatement exists when it does not. 
A) The risk that the auditor's conclusion based on a sample may be different from the conclusion if the entire population were subjected to the same audit procedure. 
B) The risk that the auditor expresses an opinion on the financial statements based on other audits. 
C) The risk that the auditor reaches an erroneous conclusion for any reason not related to sampling risk. 
D) The risk that the auditor concludes that a material misstatement exists when it does not.

Question 20

The concept of sampling risk _______.

Accepted Answer

A) is closely tied to the concept of non-statistical sampling risk 
B) is a measure of whether the sample is unrepresentative or not 
C) is a measure of whether the sample is representative or not 
D) is rarely of concern to the auditor 
A) is closely tied to the concept of non-statistical sampling risk 
B) is a measure of whether the sample is unrepresentative or not 
C) is a measure of whether the sample is representative or not 
D) is rarely of concern to the auditor

Mean per Unit (MPU) Estimation involves _______.

The major disadvantages of non-statistical sampling include _______.

The optimal number of strata depends on _______.

The results of the sample are used to estimate the _______ in the population.

Which method of selection appears quite similar to random selection?

In the given table, match the steps in planning and evaluating the sample on the left with their details on the right.

With regard to statistical sampling, _______.

What is a sampling unit?

Risk of incorrect acceptance is defined as _______.

Which of the following are the characteristics of random sampling?

Applying audit procedures is different for statistical and for non-statistical sampling.

The decision to audit an entire population is usually dependent upon _______.

Generally speaking, the larger the population, _______.

A popular way to select a sample is _______.

The tolerable misstatement is equal to or more than the materiality level set for the class of transactions or balances being tested.

The choice of using audit sampling versus audit data analytics (ADA) is often a matter of _______.

A reciprocal population is a population that is _______.

What is the resulting condition when an audit population is sufficiently small?

What is sampling risk?

The concept of sampling risk _______.

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

Mean per Unit (MPU) Estimation involves _______.

The major disadvantages of non-statistical sampling include _______.

The optimal number of strata depends on _______.

The results of the sample are used to estimate the _______ in the population.

Which method of selection appears quite similar to random selection?

In the given table, match the steps in planning and evaluating the sample on the left with their details on the right.

With regard to statistical sampling, _______.

What is a sampling unit?

Risk of incorrect acceptance is defined as _______.

Which of the following are the characteristics of random sampling?

Applying audit procedures is different for statistical and for non-statistical sampling.

The decision to audit an entire population is usually dependent upon _______.

Generally speaking, the larger the population, _______.

A popular way to select a sample is _______.

The tolerable misstatement is equal to or more than the materiality level set for the class of transactions or balances being tested.

The choice of using audit sampling versus audit data analytics (ADA) is often a matter of _______.

A reciprocal population is a population that is _______.

What is the resulting condition when an audit population is sufficiently small?

What is sampling risk?

The concept of sampling risk _______.

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