Question 1

There are three phases in both statistical and nonstatistical sampling.The first phase is to

Accepted Answer

A) generate random numbers for the sample. 
B) evaluate the results. 
C) plan the sample. 
D) select the sample. 
A) generate random numbers for the sample. 
B) evaluate the results. 
C) plan the sample. 
D) select the sample.

Question 2

When evaluating the results of attributes sampling,

Accepted Answer

A) the acceptable risk of overreliance (ARO)is set at high or low. 
B) tables are used to compute the computed upper exception rate (CUER). 
C) if the sample size is not equal to those provided for in the attributes sampling evaluation tables,the tables cannot be used. 
D) the True exception rate is computed from various tables. 
A) the acceptable risk of overreliance (ARO)is set at high or low. 
B) tables are used to compute the computed upper exception rate (CUER). 
C) if the sample size is not equal to those provided for in the attributes sampling evaluation tables,the tables cannot be used. 
D) the True exception rate is computed from various tables.

Question 3

Which of the following is an accurate statement regarding sampling?

Accepted Answer

A) A 95 percent confidence level provides a 5 percent sampling risk. 
B) The auditor can perform the audit tests only after the sample items are selected. 
C) The purpose of planning the sample is to make sure that the audit tests are performed in a manner that provides the desired sampling risk and minimizes the likelihood of nonsampling errors. 
D) All of the above are accurate statements. 
A) A 95 percent confidence level provides a 5 percent sampling risk. 
B) The auditor can perform the audit tests only after the sample items are selected. 
C) The purpose of planning the sample is to make sure that the audit tests are performed in a manner that provides the desired sampling risk and minimizes the likelihood of nonsampling errors. 
D) All of the above are accurate statements.

Question 4

Sampling risk may be controlled by

Accepted Answer

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

Question 5

The exception rate the auditor will permit in the population and still be willing to conclude that the control is operating effectively is 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 6

A sample in which every possible combination of items in the population has an equal chance of constituting the sample is a

Accepted Answer

A) random sample. 
B) statistical sample. 
C) judgment sample. 
D) representative sample. 
A) random sample. 
B) statistical sample. 
C) judgment sample. 
D) representative sample.

Question 7

Tolerable exception rate (TER)is inversely related to sample size.

Accepted Answer

A) True 
 B)False

Question 8

One way to evaluate sampling risk when nonstatistical sampling is used is to

Accepted Answer

A) subtract the sample exception rate from the tolerable exception rate. 
B) add the sample exception rate and the tolerable exception rate. 
C) subtract the sample exception rate from the acceptable risk of overreliance. 
D) add the sample exception rate and the acceptable risk of overreliance. 
A) subtract the sample exception rate from the tolerable exception rate. 
B) add the sample exception rate and the tolerable exception rate. 
C) subtract the sample exception rate from the acceptable risk of overreliance. 
D) add the sample exception rate and the acceptable risk of overreliance.

Question 9

Acceptable risk of overreliance is the risk that the auditor is willing to take in accepting a control as effective when the True population exception rate is greater than the estimated population exception rate.

Accepted Answer

A) True 
 B)False

Question 10

When selecting a sample,random numbers may be obtained either with replacement or without replacement.Although both selection methods are theoretically sound,auditors rarely use replacement sampling.

Accepted Answer

A) True 
 B)False

Question 11

The auditor must use the same TER and ARO levels for all attributes of an audit test.

Accepted Answer

A) True 
 B)False

Question 12

The most serious shortcoming of the haphazard sample selection method is

Accepted Answer

A) it is not subject to statistical sampling methods. 
B) it is time consuming to use. 
C) it is costly to use. 
D) it is difficult to remain completely unbiased in the selection. 
A) it is not subject to statistical sampling methods. 
B) it is time consuming to use. 
C) it is costly to use. 
D) it is difficult to remain completely unbiased in the selection.

Question 13

The only way to know with certainty whether a sample is representative is to subsequently audit the entire population.

Accepted Answer

A) True 
 B)False

Question 14

You are determining the appropriate sample size to test accounts receivable.What three factors are the most important to consider?

Accepted Answer

1. tolerable exception rate (T

Question 15

When analyzing exceptions,the auditor should keep in mind that

Accepted Answer

A) all exceptions must be reported to management. 
B) they should determine the breakdown in the internal controls that allowed the exceptions to occur. 
C) the nature of an exception and its causes have no effect on the qualitative evaluation of the system. 
D) exceptions do not need to be analyzed if it is too costly. 
A) all exceptions must be reported to management. 
B) they should determine the breakdown in the internal controls that allowed the exceptions to occur. 
C) the nature of an exception and its causes have no effect on the qualitative evaluation of the system. 
D) exceptions do not need to be analyzed if it is too costly.

Question 16

Which of the following must be set prior to testing a sample?

Accepted Answer

A) sample exception rate 
B) achieved upper precision limit 
C) computed exception rate 
D) tolerable exception rate 
A) sample exception rate 
B) achieved upper precision limit 
C) computed exception rate 
D) tolerable exception rate

Question 17

Which of the following statements is most correct with concerning the quantification of sampling risk?

Accepted Answer

A) Sampling risk cannot be quantified. 
B) Sampling risk can be quantified only when nonprobabilistic selection techniques are used to select the sample. 
C) Sampling risk can be quantified only when probabilistic selection techniques are used to select the sample. 
D) None of the above is correct. 
A) Sampling risk cannot be quantified. 
B) Sampling risk can be quantified only when nonprobabilistic selection techniques are used to select the sample. 
C) Sampling risk can be quantified only when probabilistic selection techniques are used to select the sample. 
D) None of the above is correct.

Question 18

Which of the following statements regarding block sampling is least likely to be True?

Accepted Answer

A) Block sampling is the selection of several items in sequence. 
B) It is acceptable to use block sampling for tests of transactions only if a reasonable number of blocks is used. 
C) Only one block should be selected to increase the probability of a representative sample. 
D) Once the first item in the block is selected,the remainder of the block is chosen automatically. 
A) Block sampling is the selection of several items in sequence. 
B) It is acceptable to use block sampling for tests of transactions only if a reasonable number of blocks is used. 
C) Only one block should be selected to increase the probability of a representative sample. 
D) Once the first item in the block is selected,the remainder of the block is chosen automatically.

Question 19

Auditors often use the ________ to determine the estimated population exception rate.

Accepted Answer

A) current year's audit results 
B) tolerable exception rate 
C) preceding year's audit results 
D) estimated computed by management 
A) current year's audit results 
B) tolerable exception rate 
C) preceding year's audit results 
D) estimated computed by management

Question 20

In practice,auditors do not know whether a sample is representative,even after all testing is complete.

Accepted Answer

A) True 
 B)False

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

There are three phases in both statistical and nonstatistical sampling.The first phase is to

When evaluating the results of attributes sampling,

Which of the following is an accurate statement regarding sampling?

Sampling risk may be controlled by

The exception rate the auditor will permit in the population and still be willing to conclude that the control is operating effectively is the

A sample in which every possible combination of items in the population has an equal chance of constituting the sample is a

Tolerable exception rate (TER)is inversely related to sample size.

One way to evaluate sampling risk when nonstatistical sampling is used is to

Acceptable risk of overreliance is the risk that the auditor is willing to take in accepting a control as effective when the True population exception rate is greater than the estimated population exception rate.

When selecting a sample,random numbers may be obtained either with replacement or without replacement.Although both selection methods are theoretically sound,auditors rarely use replacement sampling.

The auditor must use the same TER and ARO levels for all attributes of an audit test.

The most serious shortcoming of the haphazard sample selection method is

The only way to know with certainty whether a sample is representative is to subsequently audit the entire population.

You are determining the appropriate sample size to test accounts receivable.What three factors are the most important to consider?

When analyzing exceptions,the auditor should keep in mind that

Which of the following must be set prior to testing a sample?

Which of the following statements is most correct with concerning the quantification of sampling risk?

Which of the following statements regarding block sampling is least likely to be True?

Auditors often use the ________ to determine the estimated population exception rate.

In practice,auditors do not know whether a sample is representative,even after all testing is complete.

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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