Question 1

_______ involves any sample selection and evaluation method that does not have the characteristics of statistical sampling.

Accepted Answer

Non-statistical Sampling | non

Question 2

A reciprocal population is _______.

Accepted Answer

A) a population that is overstated if the population of interest is understated (or vice versa) 
B) a population that is understated if the population of interest is understated (or vice versa) 
C) a metric that is typically found on the income statement 
D) a population who have received varying audit opinions 
A) a population that is overstated if the population of interest is understated (or vice versa) 
B) a population that is understated if the population of interest is understated (or vice versa) 
C) a metric that is typically found on the income statement 
D) a population who have received varying audit opinions

Question 3

What is risk of incorrect acceptance?

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 exists when it does not exist. 
C) The risk that the auditor concludes that a material misstatement does not exist when it actually does not. 
D) The risk that the auditor concludes that a material misstatement exists when it actually does. 
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 exists when it does not exist. 
C) The risk that the auditor concludes that a material misstatement does not exist when it actually does not. 
D) The risk that the auditor concludes that a material misstatement exists when it actually does.

Question 4

_______ can be used prior to random selection to improve audit efficiency.

Accepted Answer

Stratification
Strat

Question 5

In the given table, match the concepts related to sampling on the left with their details on the right.

Accepted Answer

Non-statistical sampling requires less s

Question 6

In the given table, match the concepts given on the left of the table with their definitions on the right-hand side of table.

Accepted Answer

Stratification is a process of dividing

Question 7

In which selection method does the person selecting the sample NOT influence the choice of items selected?

Accepted Answer

A) Random selection 
B) Systematical selection 
C) Haphazard selection 
D) Selection based on professional judgment 
A) Random selection 
B) Systematical selection 
C) Haphazard selection 
D) Selection based on professional judgment

Question 8

Sampling risk is _______.

Accepted Answer

A) the same thing as audit risk 
B) 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 
C) the risk that the sample chosen by the auditor is representative of the population of transactions or items within an account balance and, as a consequence, the auditor arrives at an inappropriate conclusion 
D) inversely related to inherent risk 
A) the same thing as audit risk 
B) 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 
C) the risk that the sample chosen by the auditor is representative of the population of transactions or items within an account balance and, as a consequence, the auditor arrives at an inappropriate conclusion 
D) inversely related to inherent risk

Question 9

If the risk of material misstatement is low (e.g., the combined inherent risk and control risk assessments are low), _______.

Accepted Answer

A) then the auditor does not need as much assurance from substantive tests, and the auditor can reasonably accept a lower level of assurance from substantive tests and use smaller sample sizes for substantive testing 
B) then the auditor needs more assurance from substantive tests, and the auditor can reasonably accept a higher level of assurance from substantive tests and use greater sample sizes for substantive testing 
C) then the auditor would set audit risk at the highest possible level 
D) then the auditor should consider lowering the engagement fees 
A) then the auditor does not need as much assurance from substantive tests, and the auditor can reasonably accept a lower level of assurance from substantive tests and use smaller sample sizes for substantive testing 
B) then the auditor needs more assurance from substantive tests, and the auditor can reasonably accept a higher level of assurance from substantive tests and use greater sample sizes for substantive testing 
C) then the auditor would set audit risk at the highest possible level 
D) then the auditor should consider lowering the engagement fees

Question 10

Probability Proportionate to Size (PPS) evaluation may understate the Allowance for Sampling Risk (ASR) when misstatements are found in the sample.

Accepted Answer

A) True 
 B)False

Question 11

An advantage of statistical sampling _______.

Accepted Answer

A) is that it allows an auditor to measure control risk, that is, the risk that the sample chosen by the auditor is not representative 
B) is that it allows an auditor to measure sampling risk, that is, the risk that the sample chosen by the auditor is not representative 
C) is that it allows an auditor to measure inherent risk, that is, the risk that the sample chosen by the auditor is not representative 
D) is that it is cheaper to perform, resulting in lower audit fees for the client 
A) is that it allows an auditor to measure control risk, that is, the risk that the sample chosen by the auditor is not representative 
B) is that it allows an auditor to measure sampling risk, that is, the risk that the sample chosen by the auditor is not representative 
C) is that it allows an auditor to measure inherent risk, that is, the risk that the sample chosen by the auditor is not representative 
D) is that it is cheaper to perform, resulting in lower audit fees for the client

Question 12

In the given table, match the concepts on the left of the table with the details on the right.

Accepted Answer

Non-statistical sampling relies on the a

Question 13

_______ of the population is a way to group the population into more homogenous subgroups, which will result in more efficient sampling and reduce the size of the sample required.

Accepted Answer

Stratification
Stratification of the pop

Question 14

In which of the following cases is audit sampling is not required?

Accepted Answer

A) An audit procedure is tested on an entire group of transactions. 
B) Auditing is done on 100% of items within an account balance. 
C) There are numerous transactions or items within an account balance. 
D) The audit population is very large. 
A) An audit procedure is tested on an entire group of transactions. 
B) Auditing is done on 100% of items within an account balance. 
C) There are numerous transactions or items within an account balance. 
D) The audit population is very large.

Question 15

Determining a sample size is one step in planning and executing a _______ sample.

Accepted Answer

statistical
Determin

Question 16

Which of the following may not get the most efficient sample?

Accepted Answer

A) Non-statistical Sampling 
B) Statistical sampling 
C) Stratified sample 
D) Advance statistical method 
A) Non-statistical Sampling 
B) Statistical sampling 
C) Stratified sample 
D) Advance statistical method

Question 17

Using statistical sampling _______.

Accepted Answer

A) involves training in the use of the statistical technique and the professional judgments involved in planning and setting up the sample, as well as in evaluating sample results 
B) involves training in the use of non-statistical techniques and the professional judgments involved in planning and setting up the sample, as well as in evaluating sample results 
C) typically increases inherent risk 
D) typically decreases inherent risk 
A) involves training in the use of the statistical technique and the professional judgments involved in planning and setting up the sample, as well as in evaluating sample results 
B) involves training in the use of non-statistical techniques and the professional judgments involved in planning and setting up the sample, as well as in evaluating sample results 
C) typically increases inherent risk 
D) typically decreases inherent risk

Question 18

The smaller the amount of misstatement that the auditor can tolerate, _______.

Accepted Answer

A) the smaller the sample size 
B) the larger the sample size 
C) the larger the population size 
D) the lower inherent risk becomes 
A) the smaller the sample size 
B) the larger the sample size 
C) the larger the population size 
D) the lower inherent risk becomes

Question 19

Statistical sampling requires _______.

Accepted Answer

A) the auditor to ignore any sampling issues raised during the sampling process 
B) a sample be selected randomly, and the results of the test be evaluated using management theory. 
C) a sample be selected randomly, and the results of the test be evaluated using probability theory. 
D) a sample be selected randomly, and the results of the test be evaluated using game theory. 
A) the auditor to ignore any sampling issues raised during the sampling process 
B) a sample be selected randomly, and the results of the test be evaluated using management theory. 
C) a sample be selected randomly, and the results of the test be evaluated using probability theory. 
D) a sample be selected randomly, and the results of the test be evaluated using game theory.

Question 20

Audit sampling is defined as _______.

Accepted Answer

A) allowing engagement team members to rotate across different types of audits 
B) the probability that the auditor will receive full compensation for all services rendered 
C) The selection and evaluation of less than 100 percent of the population such that the auditor expects the items selected (the sample) to be representative of the population, and thus, likely to provide a reasonable basis for conclusions about the population 
D) The selection and evaluation of 100 percent of the population such that the auditor expects the items selected (the sample) to be representative of the population, and thus, likely to provide a reasonable basis for conclusions about the population 
A) allowing engagement team members to rotate across different types of audits 
B) the probability that the auditor will receive full compensation for all services rendered 
C) The selection and evaluation of less than 100 percent of the population such that the auditor expects the items selected (the sample) to be representative of the population, and thus, likely to provide a reasonable basis for conclusions about the population 
D) The selection and evaluation of 100 percent of the population such that the auditor expects the items selected (the sample) to be representative of the population, and thus, likely to provide a reasonable basis for conclusions about the population

_______ involves any sample selection and evaluation method that does not have the characteristics of statistical sampling.

A reciprocal population is _______.

What is risk of incorrect acceptance?

_______ can be used prior to random selection to improve audit efficiency.

In the given table, match the concepts related to sampling on the left with their details on the right.

In the given table, match the concepts given on the left of the table with their definitions on the right-hand side of table.

In which selection method does the person selecting the sample NOT influence the choice of items selected?

Sampling risk is _______.

If the risk of material misstatement is low (e.g., the combined inherent risk and control risk assessments are low), _______.

Probability Proportionate to Size (PPS) evaluation may understate the Allowance for Sampling Risk (ASR) when misstatements are found in the sample.

An advantage of statistical sampling _______.

In the given table, match the concepts on the left of the table with the details on the right.

_______ of the population is a way to group the population into more homogenous subgroups, which will result in more efficient sampling and reduce the size of the sample required.

In which of the following cases is audit sampling is not required?

Determining a sample size is one step in planning and executing a _______ sample.

Which of the following may not get the most efficient sample?

Using statistical sampling _______.

The smaller the amount of misstatement that the auditor can tolerate, _______.

Statistical sampling requires _______.

Audit sampling is defined as _______.

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

_______ involves any sample selection and evaluation method that does not have the characteristics of statistical sampling.

A reciprocal population is _______.

What is risk of incorrect acceptance?

_______ can be used prior to random selection to improve audit efficiency.

In the given table, match the concepts related to sampling on the left with their details on the right.

In the given table, match the concepts given on the left of the table with their definitions on the right-hand side of table.

In which selection method does the person selecting the sample NOT influence the choice of items selected?

Sampling risk is _______.

If the risk of material misstatement is low (e.g., the combined inherent risk and control risk assessments are low), _______.

Probability Proportionate to Size (PPS) evaluation may understate the Allowance for Sampling Risk (ASR) when misstatements are found in the sample.

An advantage of statistical sampling _______.

In the given table, match the concepts on the left of the table with the details on the right.

_______ of the population is a way to group the population into more homogenous subgroups, which will result in more efficient sampling and reduce the size of the sample required.

In which of the following cases is audit sampling is not required?

Determining a sample size is one step in planning and executing a _______ sample.

Which of the following may not get the most efficient sample?

Using statistical sampling _______.

The smaller the amount of misstatement that the auditor can tolerate, _______.

Statistical sampling requires _______.

Audit sampling is defined as _______.

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