Question 1

When using monetary unit sampling,the recorded dollar population is a definition of all the items in the

Accepted Answer

A) population. 
B) population which the auditor has included in the sample. 
C) population which contain errors. 
D) sample which contain errors. 
A) population. 
B) population which the auditor has included in the sample. 
C) population which contain errors. 
D) sample which contain errors.

Question 2

An accounts receivable population contains a total of four customers.The accounts,the amounts,and the cumulative total are shown below.Monetary unit sampling is to be used.  
Based on the information above,the population size is

Accepted Answer

A) 4) 
B) 574. 
C) 1,272. 
D) $2,684. 
A) 4) 
B) 574. 
C) 1,272. 
D) $2,684.

Question 3

Explain why monetary unit sampling,or probability proportional to size sampling,is not useful for detecting understatements.

Accepted Answer

Monetary unit sampling is a technique th

Question 4

Auditors can state the conclusions drawn from a confidence interval using statistical inference in different ways.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following conditions would lead to a larger sample size?

Accepted Answer

A) larger tolerable misstatement 
B) low inherent risk 
C) high control risk 
D) smaller account balance 
A) larger tolerable misstatement 
B) low inherent risk 
C) high control risk 
D) smaller account balance

Question 6

In monetary unit sampling,the likelihood of high dollar items from the population being included in the sample is lower than the likelihood for small dollar items.

Accepted Answer

A) True 
 B)False

Question 7

Acceptable risk of incorrect rejection affects auditors' action only when they conclude that a population is

Accepted Answer

A) fairly stated. 
B) acceptable. 
C) not fairly stated. 
D) acceptable after certain adjustments. 
A) fairly stated. 
B) acceptable. 
C) not fairly stated. 
D) acceptable after certain adjustments.

Question 8

When auditors apply MUS to a sample,the sample is selected using random sampling techniques.

Accepted Answer

A) True 
 B)False

Question 9

The use of monetary unit sampling is most appropriate when the auditor expects to find many errors and when a monetary result is desired.

Accepted Answer

A) True 
 B)False

Question 10

Explain the decision rule used in monetary unit sampling to determine whether the population is acceptable.

Accepted Answer

The results are considered acceptable if

Question 11

The most commonly used method of statistical sampling for tests of details of balances is

Accepted Answer

A) attributes sampling. 
B) systematic sampling. 
C) discovery sampling. 
D) monetary unit sampling. 
A) attributes sampling. 
B) systematic sampling. 
C) discovery sampling. 
D) monetary unit sampling.

Question 12

When analyzing misstatements,the auditor will determine

Accepted Answer

A) the implications of the misstatements on other audit areas. 
B) the potential impact on the financial statements. 
C) the effect on company operations. 
D) all of the above. 
A) the implications of the misstatements on other audit areas. 
B) the potential impact on the financial statements. 
C) the effect on company operations. 
D) all of the above.

Question 13

Factors considered by an auditor to determine the possibility that the True population misstatement exceeds a tolerable amount in a nonstatistical sample include all of the following except for

Accepted Answer

A) the extent to which items in the population have been audited 100%. 
B) the difference between the point estimate and acceptable control risk. 
C) whether misstatements tend to be offsetting or in only one direction. 
D) the amounts of individual misstatements. 
A) the extent to which items in the population have been audited 100%. 
B) the difference between the point estimate and acceptable control risk. 
C) whether misstatements tend to be offsetting or in only one direction. 
D) the amounts of individual misstatements.

Question 14

Required sample size increases as the auditor's tolerable misstatement for an account balance or class of transactions decreases.

Accepted Answer

A) True 
 B)False

Question 15

In difference estimation sampling,the confidence limits are calculated by combining the point estimate of the total misstatements and the computed precision interval at the desired confidence level.

Accepted Answer

A) True 
 B)False

Question 16

An increased sample size will always cause the population to be accepted.

Accepted Answer

A) True 
 B)False

Question 17

Stratified sampling is applicable to difference,mean-per-unit,and ratio estimation,but it is most commonly used with

Accepted Answer

A) ratio estimation. 
B) discovery sampling. 
C) difference estimation. 
D) mean-per-unit estimation. 
A) ratio estimation. 
B) discovery sampling. 
C) difference estimation. 
D) mean-per-unit estimation.

Question 18

Accounts with zero or negative year-end balances have no chance of being included in a standard probability proportional to size (PPS)sample.

Accepted Answer

A) True 
 B)False

Exam 17: Audit Sampling for Tests of Details of Balances

When using monetary unit sampling,the recorded dollar population is a definition of all the items in the

An accounts receivable population contains a total of four customers.The accounts,the amounts,and the cumulative total are shown below.Monetary unit sampling is to be used. Based on the information above,the population size is

Explain why monetary unit sampling,or probability proportional to size sampling,is not useful for detecting understatements.

Auditors can state the conclusions drawn from a confidence interval using statistical inference in different ways.

Which of the following conditions would lead to a larger sample size?

In monetary unit sampling,the likelihood of high dollar items from the population being included in the sample is lower than the likelihood for small dollar items.

Acceptable risk of incorrect rejection affects auditors' action only when they conclude that a population is

When auditors apply MUS to a sample,the sample is selected using random sampling techniques.

The use of monetary unit sampling is most appropriate when the auditor expects to find many errors and when a monetary result is desired.

Explain the decision rule used in monetary unit sampling to determine whether the population is acceptable.

The most commonly used method of statistical sampling for tests of details of balances is

When analyzing misstatements,the auditor will determine

Factors considered by an auditor to determine the possibility that the True population misstatement exceeds a tolerable amount in a nonstatistical sample include all of the following except for

Required sample size increases as the auditor's tolerable misstatement for an account balance or class of transactions decreases.

In difference estimation sampling,the confidence limits are calculated by combining the point estimate of the total misstatements and the computed precision interval at the desired confidence level.

An increased sample size will always cause the population to be accepted.

Stratified sampling is applicable to difference,mean-per-unit,and ratio estimation,but it is most commonly used with

Accounts with zero or negative year-end balances have no chance of being included in a standard probability proportional to size (PPS)sample.

The Demand for Audit and Other Assurance Services

The Cpa Profession

Audit Reports

Professional Ethics

Legal Liability

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Audit Evidence

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Materiality and Risk

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Audit of the Sales and Collection Cycle: Tests of Controls

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

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

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

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Completing the Audit

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