Question 1

List the two ways auditors can control sampling risk.

Accepted Answer

Auditors can control sampling

Question 2

Which of the following is not a term related to evaluating results in audit sampling until after a sample is tested and evaluated?

Accepted Answer

A) sample exception rate 
B) estimated population exception rate 
C) computed upper exception rate 
D) exception 
A) sample exception rate 
B) estimated population exception rate 
C) computed upper exception rate 
D) exception

Question 3

For which of the following audit procedures would audit sampling not be appropriate?

Accepted Answer

A) Review sales transactions for large and unusual amounts. 
B) Examine a sample of duplicate sales invoices for credit approval. 
C) Compare the quantity on duplicate sales invoices with the quantity on related shipping documents. 
D) Audit sampling is appropriate for each of the above procedures. 
A) Review sales transactions for large and unusual amounts. 
B) Examine a sample of duplicate sales invoices for credit approval. 
C) Compare the quantity on duplicate sales invoices with the quantity on related shipping documents. 
D) Audit sampling is appropriate for each of the above procedures.

Question 4

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

Accepted Answer

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

Question 5

When planning the sample,

Accepted Answer

A) auditors using attributes sampling assign a low,medium,or high acceptable risk of overreliance. 
B) tables are used by the auditor in statistical sampling to determine initial sample size. 
C) most auditors use attributes sampling for medium to small populations. 
D) the tolerable exception rate does not need to be specified for statistical sampling. 
A) auditors using attributes sampling assign a low,medium,or high acceptable risk of overreliance. 
B) tables are used by the auditor in statistical sampling to determine initial sample size. 
C) most auditors use attributes sampling for medium to small populations. 
D) the tolerable exception rate does not need to be specified for statistical sampling.

Question 6

Which of the following is the risk that audit tests will not uncover existing exceptions in a sample?

Accepted Answer

A) sampling risk 
B) nonsampling risk 
C) audit risk 
D) detection risk 
A) sampling risk 
B) nonsampling risk 
C) audit risk 
D) detection risk

Question 7

Although systematic sample selection is easy to use,its primary disadvantage is that it is not a probabilistic sampling method.

Accepted Answer

A) True 
 B)False

Question 8

The sample exception rate equals

Accepted Answer

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

Question 9

The tolerable exception rate is the rate that the auditor will permit in the population and still be willing to conclude a control is effective.

Accepted Answer

A) True 
 B)False

Question 10

A danger in setting the acceptable risk of overreliance too low is

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 11

You are determining the significance of the following: you set a 5% risk of assessing control risk too low and your computation of the upper deviation risk is 7%.What could you conclude?

Accepted Answer

A) There is a 95% chance the deviation rate is the population is less than 5%. 
B) There is a 5% chance the deviation rate in the population is less than 7%. 
C) There is a 95% chance the deviation rate in the population exceeds 95%. 
D) There is a 5% chance the deviation rate in the population exceeds 7%. 
A) There is a 95% chance the deviation rate is the population is less than 5%. 
B) There is a 5% chance the deviation rate in the population is less than 7%. 
C) There is a 95% chance the deviation rate in the population exceeds 95%. 
D) There is a 5% chance the deviation rate in the population exceeds 7%.

Question 12

The acceptable risk of overreliance

Accepted Answer

A) is the risk that the auditor will erroneously conclude that the controls are less effective than they actually are. 
B) is less of a concern to the auditors than the risk of underreliance. 
C) represents the auditor's measure of sampling risk. 
D) is determined by a statistical formula,and not by professional judgment. 
A) is the risk that the auditor will erroneously conclude that the controls are less effective than they actually are. 
B) is less of a concern to the auditors than the risk of underreliance. 
C) represents the auditor's measure of sampling risk. 
D) is determined by a statistical formula,and not by professional judgment.

Question 13

Which of the following is the exception rate that the auditor expects to find before testing?

Accepted Answer

A) sample exception rate 
B) estimated population exception rate 
C) computed exception rate 
D) tolerable exception rate 
A) sample exception rate 
B) estimated population exception rate 
C) computed exception rate 
D) tolerable exception rate

Question 14

There are 14 steps to attributes sampling,divided into three sections: plan the sample,select the sample and perform the audit procedures,and evaluate the results.Discuss the three steps that comprise the "evaluate the results" section.

Accepted Answer

The steps that comprise the "evaluate th

Question 15

Which one of the choices below is most correct regarding a cause of sampling risk?

Accepted Answer

A) ineffective use of audit procedures 
B) testing less than the entire population 
C) use of extensive tests of controls 
D) use of random sampling 
A) ineffective use of audit procedures 
B) testing less than the entire population 
C) use of extensive tests of controls 
D) use of random sampling

Question 16

Which of the following is one of the main differences between attributes sampling and nonstatistical sampling?

Accepted Answer

A) the number of steps involved 
B) the calculation of the initial sample sizes 
C) determining the objectives of the audit test 
D) defining the population 
A) the number of steps involved 
B) the calculation of the initial sample sizes 
C) determining the objectives of the audit test 
D) defining the population

Question 17

Attributes sampling is based on the ________ distribution,in which each possible sample in the population has one of two possible values,such as yes or no.

Accepted Answer

A) random 
B) binomial 
C) statistical 
D) nonstatistical 
A) random 
B) binomial 
C) statistical 
D) nonstatistical

Question 18

It is equally acceptable under professional auditing standards for auditors to use either statistical or nonstatistical sampling methods.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following results in a larger sample size?

Accepted Answer

A) Decrease the estimated population exception rate and decrease the tolerable exception rate. 
B) Increase the estimated population exception rate and decrease the tolerable exception rate. 
C) Decrease the estimated population exception rate and increase the tolerable exception rate. 
D) Increase the estimated population exception rate and increase the tolerable exception rate. 
A) Decrease the estimated population exception rate and decrease the tolerable exception rate. 
B) Increase the estimated population exception rate and decrease the tolerable exception rate. 
C) Decrease the estimated population exception rate and increase the tolerable exception rate. 
D) Increase the estimated population exception rate and increase the tolerable exception rate.

Question 20

In using sampling distribution for attributes,which one of the following must be known to evaluate the sample results?

Accepted Answer

A) estimated dollar value of the population 
B) standard exception of the values in the population 
C) actual exception rate of the attribute in the population 
D) sample size 
A) estimated dollar value of the population 
B) standard exception of the values in the population 
C) actual exception rate of the attribute in the population 
D) sample size

Exam 15: Audit Sampling for Tests of Controls and Substantive Tests of Transactions

List the two ways auditors can control sampling risk.

Which of the following is not a term related to evaluating results in audit sampling until after a sample is tested and evaluated?

For which of the following audit procedures would audit sampling not be appropriate?

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

When planning the sample,

Which of the following is the risk that audit tests will not uncover existing exceptions in a sample?

Although systematic sample selection is easy to use,its primary disadvantage is that it is not a probabilistic sampling method.

The sample exception rate equals

The tolerable exception rate is the rate that the auditor will permit in the population and still be willing to conclude a control is effective.

A danger in setting the acceptable risk of overreliance too low is

You are determining the significance of the following: you set a 5% risk of assessing control risk too low and your computation of the upper deviation risk is 7%.What could you conclude?

The acceptable risk of overreliance

Which of the following is the exception rate that the auditor expects to find before testing?

There are 14 steps to attributes sampling,divided into three sections: plan the sample,select the sample and perform the audit procedures,and evaluate the results.Discuss the three steps that comprise the "evaluate the results" section.

Which one of the choices below is most correct regarding a cause of sampling risk?

Which of the following is one of the main differences between attributes sampling and nonstatistical sampling?

Attributes sampling is based on the ________ distribution,in which each possible sample in the population has one of two possible values,such as yes or no.

It is equally acceptable under professional auditing standards for auditors to use either statistical or nonstatistical sampling methods.

Which of the following results in a larger sample size?

In using sampling distribution for attributes,which one of the following must be known to evaluate the sample results?

The Demand for Audit and Other Assurance Services

The Cpa Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Analytical Procedures

Materiality and Risk

Fraud Auditing

Internal Control and Coso Framework

Assessing Control Risk and Reporting on Internal Controls

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls,

Completing the Tests in the Acquisition and Payment Cycle:

Audit of the Payroll and Personnel Cycle

Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

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