Question 1

In MUS, what is meant by a sampling interval of 900?

Accepted Answer

A)  Every 900th item will be selected. 
B)  Every 900th dollar will be selected. 
C)  Expected misstatement is 900. 
D)  Tolerable misstatement is 900. 
A)  Every 900th item will be selected. 
B)  Every 900th dollar will be selected. 
C)  Expected misstatement is 900. 
D)  Tolerable misstatement is 900. B

Question 2

Which of the following is not an item the auditor needs to determine in designing sampling for substantive testing?

Accepted Answer

A)  The audit objective. 
B)  The method of selecting a sample. 
C)  Expected misstatement conditions. 
D)  Expected deviation rate. 
A)  The audit objective. 
B)  The method of selecting a sample. 
C)  Expected misstatement conditions. 
D)  Expected deviation rate. D

Question 3

Using MUS sampling.
Describe MUS sampling and identify the conditions that would cause an auditor choose to use MUS sampling.

Accepted Answer

MUS sampling is an adaptation of attribute sampling methods to dollar value testing. It was developed specifically for use in auditing. MUS sampling is most effective when testing for overstatements in situations when few misstatements are expected. Individual book values must be available for testing. The population for MUS sampling is defined as the number of dollars in the account balance being tested. Each dollar in the population has an equal chance of being chosen, but each dollar is associated with a particular item such as an inventory item.

Question 4

In selecting a sample for attribute testing, systematic selection involves which of the following approaches?

Accepted Answer

A)  Each item in the population having an equal chance of selection. 
B)  Every nth item being selected after a random start. 
C)  An arbitrary selection with no conscious bias. 
D)  Selecting all items on a day or week. 
A)  Each item in the population having an equal chance of selection. 
B)  Every nth item being selected after a random start. 
C)  An arbitrary selection with no conscious bias. 
D)  Selecting all items on a day or week.

Question 5

When testing controls, the use of haphazard selection of a sample allows for random, statistical evaluation.

Accepted Answer

A) True 
 B)False

Question 6

Planning and documentation of an attribute sampling plan.
What are the steps to implement an attribute sampling plan?

Accepted Answer

The auditor should include the following

Question 7

Attribute sampling for testing controls should only be done by the auditor at the end of the fiscal period under audit.

Accepted Answer

A) True 
 B)False

Question 8

That auditor will do which of the following when the results of sample testing conclude that there is misstatement in excess of the tolerable misstatement?

Accepted Answer

A)  Issue a disclaimer of opinion. 
B)  Throw out the sample. 
C)  Propose adjustments to the client. 
D)  Disclose the misstatement in the client's financial statements. 
A)  Issue a disclaimer of opinion. 
B)  Throw out the sample. 
C)  Propose adjustments to the client. 
D)  Disclose the misstatement in the client's financial statements.

Question 9

Which one of the following issues need not be addressed when planning an audit sample to test control procedures?

Accepted Answer

A)  Audit objective of the test. 
B)  Minimum failure rate. 
C)  Expected population deviation rate. 
D)  Auditor's allowable risk of assessing control risk too low. 
A)  Audit objective of the test. 
B)  Minimum failure rate. 
C)  Expected population deviation rate. 
D)  Auditor's allowable risk of assessing control risk too low.

Question 10

Random sampling can be used even if the auditor does not plan on using statistical sampling.

Accepted Answer

A) True 
 B)False

Question 11

In attribute sampling, the risk of incorrect rejection deals with which of the following?

Accepted Answer

A)  Effectiveness. 
B)  Efficiency. 
C)  Reliability. 
D)  Both A and B. 
A)  Effectiveness. 
B)  Efficiency. 
C)  Reliability. 
D)  Both A and B.

Question 12

Evaluating statistical sample results is one of the tasks that can be performed by GAS.

Accepted Answer

A) True 
 B)False

Question 13

In attribute sampling, which of the following does the risk of incorrect acceptance deal with?

Accepted Answer

A)  Effectiveness. 
B)  Efficiency. 
C)  Reliability. 
D)  Both A and B. 
A)  Effectiveness. 
B)  Efficiency. 
C)  Reliability. 
D)  Both A and B.

Question 14

When using MUS, an auditor found that the sampling interval should be $15,755. If selecting the sample manually, the auditor should round the sample interval to which of the following amounts?

Accepted Answer

A)  $16,000. 
B)  $15,000. 
C)  $14,000. 
D)  $10,000. 
A)  $16,000. 
B)  $15,000. 
C)  $14,000. 
D)  $10,000.

Question 15

Sample size in a MUS sample is a function of risk of incorrect acceptance, tolerable misstatement, and expected misstatement.

Accepted Answer

A) True 
 B)False

Question 16

Which one of the following is a decision the auditor makes when using attribute sampling?

Accepted Answer

A)  The sampling unit. 
B)  Period covered by testing. 
C)  Completeness of the population. 
D)  All of the above are auditor decisions. 
A)  The sampling unit. 
B)  Period covered by testing. 
C)  Completeness of the population. 
D)  All of the above are auditor decisions.

Question 17

Advantages of MUS sampling.
Discuss the advantages of monetary unit sampling over other sampling methods.

Accepted Answer

∙ MUS is generally easier to apply than

Question 18

Which of the following describes sampling risk?

Accepted Answer

A)  The sample will not contain characteristics representative of the population such that inferences made about that population will be incorrect. 
B)  The population will not contain characteristics representative of the sample such that inferences made about that sample will be incorrect. 
C)  The auditor incorrectly applies sampling methodology. 
D)  The sample size will be larger than needed. 
A)  The sample will not contain characteristics representative of the population such that inferences made about that population will be incorrect. 
B)  The population will not contain characteristics representative of the sample such that inferences made about that sample will be incorrect. 
C)  The auditor incorrectly applies sampling methodology. 
D)  The sample size will be larger than needed.

Question 19

While auditors may use either statistical or non-statistical sampling, some auditors restrict the use of non-statistical sampling for what reason?

Accepted Answer

A)  It is less effective. 
B)  It is less objective. 
C)  It is less efficient. 
D)  It is less risky. 
A)  It is less effective. 
B)  It is less objective. 
C)  It is less efficient. 
D)  It is less risky.

Question 20

Projected misstatements are developed by extrapolation from the misstatements in sample items to the population.

Accepted Answer

A) True 
 B)False

In MUS, what is meant by a sampling interval of 900?

Which of the following is not an item the auditor needs to determine in designing sampling for substantive testing?

Using MUS sampling. Describe MUS sampling and identify the conditions that would cause an auditor choose to use MUS sampling.

In selecting a sample for attribute testing, systematic selection involves which of the following approaches?

When testing controls, the use of haphazard selection of a sample allows for random, statistical evaluation.

Planning and documentation of an attribute sampling plan. What are the steps to implement an attribute sampling plan?

Attribute sampling for testing controls should only be done by the auditor at the end of the fiscal period under audit.

That auditor will do which of the following when the results of sample testing conclude that there is misstatement in excess of the tolerable misstatement?

Which one of the following issues need not be addressed when planning an audit sample to test control procedures?

Random sampling can be used even if the auditor does not plan on using statistical sampling.

In attribute sampling, the risk of incorrect rejection deals with which of the following?

Evaluating statistical sample results is one of the tasks that can be performed by GAS.

In attribute sampling, which of the following does the risk of incorrect acceptance deal with?

When using MUS, an auditor found that the sampling interval should be $15,755. If selecting the sample manually, the auditor should round the sample interval to which of the following amounts?

Sample size in a MUS sample is a function of risk of incorrect acceptance, tolerable misstatement, and expected misstatement.

Which one of the following is a decision the auditor makes when using attribute sampling?

Advantages of MUS sampling. Discuss the advantages of monetary unit sampling over other sampling methods.

Which of the following describes sampling risk?

While auditors may use either statistical or non-statistical sampling, some auditors restrict the use of non-statistical sampling for what reason?

Projected misstatements are developed by extrapolation from the misstatements in sample items to the population.

Auditing: Integral to the Economy

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditors

Professional Liability, Auditor Judgment Frameworks, and Professional Responsibilities

Professional Auditing Standards and the Audit Opinion Formulation Process

A Framework for Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Debt Obligations and Stockholders Equity Transactions

Activities Required in Completing a Quality Audit

Audit Reports on Financial Statements

Advanced Topics Concerning Complex Auditing Judgments

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Exam 8: Specialized Audit Tools: Sampling and Generalized Audit Software

In MUS, what is meant by a sampling interval of 900?

Which of the following is not an item the auditor needs to determine in designing sampling for substantive testing?

Using MUS sampling. Describe MUS sampling and identify the conditions that would cause an auditor choose to use MUS sampling.

In selecting a sample for attribute testing, systematic selection involves which of the following approaches?

When testing controls, the use of haphazard selection of a sample allows for random, statistical evaluation.

Planning and documentation of an attribute sampling plan. What are the steps to implement an attribute sampling plan?

Attribute sampling for testing controls should only be done by the auditor at the end of the fiscal period under audit.

That auditor will do which of the following when the results of sample testing conclude that there is misstatement in excess of the tolerable misstatement?

Which one of the following issues need not be addressed when planning an audit sample to test control procedures?

Random sampling can be used even if the auditor does not plan on using statistical sampling.

In attribute sampling, the risk of incorrect rejection deals with which of the following?

Evaluating statistical sample results is one of the tasks that can be performed by GAS.

In attribute sampling, which of the following does the risk of incorrect acceptance deal with?

When using MUS, an auditor found that the sampling interval should be $15,755. If selecting the sample manually, the auditor should round the sample interval to which of the following amounts?

Sample size in a MUS sample is a function of risk of incorrect acceptance, tolerable misstatement, and expected misstatement.

Which one of the following is a decision the auditor makes when using attribute sampling?

Advantages of MUS sampling. Discuss the advantages of monetary unit sampling over other sampling methods.

Which of the following describes sampling risk?

While auditors may use either statistical or non-statistical sampling, some auditors restrict the use of non-statistical sampling for what reason?

Projected misstatements are developed by extrapolation from the misstatements in sample items to the population.

Auditing: Integral to the Economy

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditors

Professional Liability, Auditor Judgment Frameworks, and Professional Responsibilities

Professional Auditing Standards and the Audit Opinion Formulation Process

A Framework for Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Debt Obligations and Stockholders Equity Transactions

Activities Required in Completing a Quality Audit

Audit Reports on Financial Statements

Advanced Topics Concerning Complex Auditing Judgments

Other Services Provided by Audit Firms

Filters