Question 1

The exception rate the auditor will permit in the population and still be willing to use the assessed level of control risk is called the

Accepted Answer

A) tolerable exception rate. 
B) estimated population exception rate. 
C) acceptable risk of overreliance. 
D) sample exception rate. 
A) tolerable exception rate. 
B) estimated population exception rate. 
C) acceptable risk of overreliance. 
D) sample exception rate.

Question 2

Kyle is performing a test of detail using a nonstatistical sample.A)Can Kyle formally measure sampling error? B)What should Kyle consider in determining the sampling error?

Accepted Answer

A)No,Kyle cannot formally measure the sa

Question 3

Helen found that the expense reports were not properly approved while the senior accounts payable clerk was on vacation in July.Helen decided to perform a test of control on the authorization of expense reports for all the months except for July,which she will test substantively.Helen is allowed to do this because

Accepted Answer

A) the authorized expense reports for July are not material. 
B) it would not be cost beneficial to test the entire population substantively. 
C) the authorizations for the month of July are not representative of the population as a whole. 
D) compensating controls exist in the payroll reconciliation process. 
A) the authorized expense reports for July are not material. 
B) it would not be cost beneficial to test the entire population substantively. 
C) the authorizations for the month of July are not representative of the population as a whole. 
D) compensating controls exist in the payroll reconciliation process.

Question 4

When the auditor goes through a population and selects items for the sample without regard to their size,source,or other distinguishing characteristics,it is called

Accepted Answer

A) block selection. 
B) haphazard selection. 
C) systematic selection. 
D) statistical selection. 
A) block selection. 
B) haphazard selection. 
C) systematic selection. 
D) statistical selection.

Question 5

Sampling risk (sampling error)is an inherent part of sampling that results from

Accepted Answer

A) inappropriate audit procedures. 
B) failure to recognize exceptions. 
C) testing less than the entire population. 
D) weaknesses in the client's internal control system. 
A) inappropriate audit procedures. 
B) failure to recognize exceptions. 
C) testing less than the entire population. 
D) weaknesses in the client's internal control system.

Question 6

The sample exception rate equals the number of

Accepted Answer

A) exceptions in the population divided by the sample size. 
B) items in the population multiplied by the number of exceptions in the sample. 
C) exceptions in the sample divided by the sample size. 
D) exceptions in the population divided by the population size. 
A) exceptions in the population divided by the sample size. 
B) items in the population multiplied by the number of exceptions in the sample. 
C) exceptions in the sample divided by the sample size. 
D) exceptions in the population divided by the population size.

Question 7

You have just been given the approval to conduct statistical sampling for the audit of capital assets acquisitions.Previously,this work was completed using a judgmental sample.
Required:
Explain the key areas where decisions need to be made when conducting audit work using a statistical sample.

Accepted Answer

Decisions are made or professional judgm

Question 8

When an auditor selects a sample from a population,the objective is to obtain a sample that is

Accepted Answer

A) representative. 
B) random. 
C) free from nonsampling risk. 
D) precise. 
A) representative. 
B) random. 
C) free from nonsampling risk. 
D) precise.

Question 9

The overall objectives of the audit test must be stated in terms of the

Accepted Answer

A) anticipated results. 
B) transaction cycle being tested. 
C) risks addressed and the transaction cycle being tested. 
D) risk addressed and the anticipated results. 
A) anticipated results. 
B) transaction cycle being tested. 
C) risks addressed and the transaction cycle being tested. 
D) risk addressed and the anticipated results.

Question 10

Nonsampling errors occur when audit tests do not uncover existing exceptions in the

Accepted Answer

A) population. 
B) sample. 
C) planning stage. 
D) financial statements. 
A) population. 
B) sample. 
C) planning stage. 
D) financial statements.

Question 11

An advantage of using statistical over nonstatistical sampling methods in tests of controls is that the statistical methods

Accepted Answer

A) afford greater assurance and clarity than a nonstatistical sample of equal size. 
B) provide an objective basis for quantitatively evaluating sample risks. 
C) can more easily convert the sample into a dual-purpose test useful for substantive testing. 
D) eliminate the need to use judgment in determining appropriate sample sizes. 
A) afford greater assurance and clarity than a nonstatistical sample of equal size. 
B) provide an objective basis for quantitatively evaluating sample risks. 
C) can more easily convert the sample into a dual-purpose test useful for substantive testing. 
D) eliminate the need to use judgment in determining appropriate sample sizes.

Question 12

An underlying feature of the random-based selection of items is that each

Accepted Answer

A) stratum of the population is given equal representation in the sample. 
B) each item in the population must be randomly ordered. 
C) each item in the population should have an equal opportunity to be selected. 
D) each item must be systematically selected using replacement. 
A) stratum of the population is given equal representation in the sample. 
B) each item in the population must be randomly ordered. 
C) each item in the population should have an equal opportunity to be selected. 
D) each item must be systematically selected using replacement.

Question 13

In monetary unit sampling,the values of the estimated likely maximum misstatements are referred to as the

Accepted Answer

A) point estimates. 
B) precision intervals. 
C) confidence intervals. 
D) misstatement bounds. 
A) point estimates. 
B) precision intervals. 
C) confidence intervals. 
D) misstatement bounds.

Question 14

An auditor who uses statistical sampling for attributes in testing internal controls should increase the assessed level of control risk when the

Accepted Answer

A) sample rate of exceptions is less than the expected rate of exception used in planning the sample. 
B) tolerable exception rate less the allowance for sampling risk exceeds the sample rate of deviation. 
C) sample rate of exceptions plus the allowance for sampling risk exceeds the tolerable exception rate. 
D) sample rate of exceptions plus the allowance for sampling risk equals the tolerable exception rate. 
A) sample rate of exceptions is less than the expected rate of exception used in planning the sample. 
B) tolerable exception rate less the allowance for sampling risk exceeds the sample rate of deviation. 
C) sample rate of exceptions plus the allowance for sampling risk exceeds the tolerable exception rate. 
D) sample rate of exceptions plus the allowance for sampling risk equals the tolerable exception rate.

Question 15

Auditors consider statistical sampling to be characterized by

Accepted Answer

A) representative sample selection and statistical calculation of the results. 
B) representative sample selection and nonmathematical consideration of the results. 
C) carefully biased sample selection and statistical calculation of the results. 
D) carefully biased sample selection and nonmathematical consideration of the results. 
A) representative sample selection and statistical calculation of the results. 
B) representative sample selection and nonmathematical consideration of the results. 
C) carefully biased sample selection and statistical calculation of the results. 
D) carefully biased sample selection and nonmathematical consideration of the results.

Question 16

A statistical method used to estimate the proportion of items in a population containing a characteristic of interest is

Accepted Answer

A) population-proportional-to-size sampling. 
B) attribute sampling. 
C) variables sampling. 
D) estimation sampling. 
A) population-proportional-to-size sampling. 
B) attribute sampling. 
C) variables sampling. 
D) estimation sampling.

Question 17

If an auditor would like to estimate how many sales invoices have errors (such as no required order number showing or authorization for customers exceeding their credit limit),the auditor would likely use

Accepted Answer

A) random sampling with replacement. 
B) sampling for attributes. 
C) sampling for variables. 
D) stratified random sampling. 
A) random sampling with replacement. 
B) sampling for attributes. 
C) sampling for variables. 
D) stratified random sampling.

Question 18

In systematic selection,population size is divided by the number of sample items desired in order to determine the

Accepted Answer

A) interval. 
B) tolerable exception rate. 
C) computed upper exception rate. 
D) mean. 
A) interval. 
B) tolerable exception rate. 
C) computed upper exception rate. 
D) mean.

The exception rate the auditor will permit in the population and still be willing to use the assessed level of control risk is called the

Kyle is performing a test of detail using a nonstatistical sample.A)Can Kyle formally measure sampling error? B)What should Kyle consider in determining the sampling error?

When the auditor goes through a population and selects items for the sample without regard to their size,source,or other distinguishing characteristics,it is called

Sampling risk (sampling error)is an inherent part of sampling that results from

The sample exception rate equals the number of

You have just been given the approval to conduct statistical sampling for the audit of capital assets acquisitions.Previously,this work was completed using a judgmental sample. Required: Explain the key areas where decisions need to be made when conducting audit work using a statistical sample.

When an auditor selects a sample from a population,the objective is to obtain a sample that is

The overall objectives of the audit test must be stated in terms of the

Nonsampling errors occur when audit tests do not uncover existing exceptions in the

An advantage of using statistical over nonstatistical sampling methods in tests of controls is that the statistical methods

An underlying feature of the random-based selection of items is that each

In monetary unit sampling,the values of the estimated likely maximum misstatements are referred to as the

An auditor who uses statistical sampling for attributes in testing internal controls should increase the assessed level of control risk when the

Auditors consider statistical sampling to be characterized by

A statistical method used to estimate the proportion of items in a population containing a characteristic of interest is

If an auditor would like to estimate how many sales invoices have errors (such as no required order number showing or authorization for customers exceeding their credit limit),the auditor would likely use

In systematic selection,population size is divided by the number of sample items desired in order to determine the

The Demand for Audit and Other Assurance Services

The Public Accounting Profession and Audit Quality

Professional Ethics and Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Client Acceptance,Planning,and Materiality

Assessing the Risk of Material Misstatement

Internal Control and COSO Framework

Assessing Control Risk and Designing Test of Controls

Develop Risk Response: Audit Strategy and Audit Program

Audit of the Revenue Cycle

Audit of the Acquisition and Payment Cycle

Audit of the Inventory and Distribution Cycle

Audit of the Human Resources and Payroll Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Audit Reports on Financial Statements

Other Assurance and Nonassurance Services

Filters

Exam 11: Audit Sampling Concepts

The exception rate the auditor will permit in the population and still be willing to use the assessed level of control risk is called the

Kyle is performing a test of detail using a nonstatistical sample.A)Can Kyle formally measure sampling error? B)What should Kyle consider in determining the sampling error?

When the auditor goes through a population and selects items for the sample without regard to their size,source,or other distinguishing characteristics,it is called

Sampling risk (sampling error)is an inherent part of sampling that results from

The sample exception rate equals the number of

You have just been given the approval to conduct statistical sampling for the audit of capital assets acquisitions.Previously,this work was completed using a judgmental sample. Required: Explain the key areas where decisions need to be made when conducting audit work using a statistical sample.

When an auditor selects a sample from a population,the objective is to obtain a sample that is

The overall objectives of the audit test must be stated in terms of the

Nonsampling errors occur when audit tests do not uncover existing exceptions in the

An advantage of using statistical over nonstatistical sampling methods in tests of controls is that the statistical methods

An underlying feature of the random-based selection of items is that each

In monetary unit sampling,the values of the estimated likely maximum misstatements are referred to as the

An auditor who uses statistical sampling for attributes in testing internal controls should increase the assessed level of control risk when the

Auditors consider statistical sampling to be characterized by

A statistical method used to estimate the proportion of items in a population containing a characteristic of interest is

If an auditor would like to estimate how many sales invoices have errors (such as no required order number showing or authorization for customers exceeding their credit limit),the auditor would likely use

In systematic selection,population size is divided by the number of sample items desired in order to determine the

The Demand for Audit and Other Assurance Services

The Public Accounting Profession and Audit Quality

Professional Ethics and Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Client Acceptance,Planning,and Materiality

Assessing the Risk of Material Misstatement

Internal Control and COSO Framework

Assessing Control Risk and Designing Test of Controls

Develop Risk Response: Audit Strategy and Audit Program

Audit of the Revenue Cycle

Audit of the Acquisition and Payment Cycle

Audit of the Inventory and Distribution Cycle

Audit of the Human Resources and Payroll Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Audit Reports on Financial Statements

Other Assurance and Nonassurance Services

Filters