Question 1

Which of the following sampling plans would be designed to estimate a numerical measurement of a population, such as a dollar value?

Accepted Answer

A) Numerical sampling 
B) Discovery sampling 
C) Attributes sampling 
D) Variable sampling 
A) Numerical sampling 
B) Discovery sampling 
C) Attributes sampling 
D) Variable sampling

Question 2

In monetary unit sampling, the relationship between tolerable misstatement size and required sample size is:

Accepted Answer

A) direct. 
B) inverse. 
C) varied. 
D) indeterminable. 
A) direct. 
B) inverse. 
C) varied. 
D) indeterminable.

Question 3

Monetary unit sampling is not particularly effective at detecting:

Accepted Answer

A) overstatements. 
B) understatements. 
C) errors in current assets. 
D) errors in noncurrent assets. 
A) overstatements. 
B) understatements. 
C) errors in current assets. 
D) errors in noncurrent assets.

Question 4

When selecting a stratified sample, the sample size is:

Accepted Answer

A) determined for the unstratified population and then apportioned to each stratum. 
B) determined for each stratum and selected from that stratum. 
C) determined for each stratum and selected randomly from the entire unstratified population. 
D) always larger than if unstratified sampling had been used. 
A) determined for the unstratified population and then apportioned to each stratum. 
B) determined for each stratum and selected from that stratum. 
C) determined for each stratum and selected randomly from the entire unstratified population. 
D) always larger than if unstratified sampling had been used.

Question 5

There are 14 steps to audit sampling for details of balances, divided into three sections: plan the sample, select the sample and perform the audit procedures, and evaluate the results.Discuss each of the steps included in the "evaluate the results" section for nonstatistical sampling.

Accepted Answer

The steps included in the "evaluate the

Question 6

You are auditing Nelson and Company and determined that the sample results support a conclusion that the account is materially misstated, when in fact it was not misstated.This illustrates the risk of:

Accepted Answer

A) incorrect acceptance. 
B) incorrect rejection. 
C) control risk too low. 
D) control risk too high. 
A) incorrect acceptance. 
B) incorrect rejection. 
C) control risk too low. 
D) control risk too high.

Question 7

When using MUS, the projected misstatement is the percentage misstatement times the sampling interval.

Accepted Answer

A) True 
 B)False

Question 8

When dealing with variables sampling and sampling risk, it is important to understand that:

Accepted Answer

A) for variables sampling, auditors uses ARIA but not ARIR. 
B) ARIR is of serious concern to the auditor because of potential legal implications. 
C) ARIA is a one-tailed statistical test. 
D) the confidence coefficients for ARIA are the same as the confidence level. 
A) for variables sampling, auditors uses ARIA but not ARIR. 
B) ARIR is of serious concern to the auditor because of potential legal implications. 
C) ARIA is a one-tailed statistical test. 
D) the confidence coefficients for ARIA are the same as the confidence level.

Question 9

The AICPA audit sampling formula for computing nonstatistical tests of details of balances sample size is to multiply the population recorded amount by the ________ and then divide by the ________.

Accepted Answer

A) confidence factor, ARIA 
B) confidence factor, tolerable misstatement 
C) ARO, tolerable misstatement 
D) risk of incorrect acceptance, confidence factor 
A) confidence factor, ARIA 
B) confidence factor, tolerable misstatement 
C) ARO, tolerable misstatement 
D) risk of incorrect acceptance, confidence factor

Question 10

ARIA measures the auditor's desired assurance for an account balance.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following item(s)are needed to determine the sample size using MUS?

Accepted Answer

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

Question 12

When using monetary unit sampling, evaluating the likelihood of unrecorded items in the population is:

Accepted Answer

A) unnecessary. 
B) impossible. 
C) possible but difficult. 
D) an automatic outcome of the process. 
A) unnecessary. 
B) impossible. 
C) possible but difficult. 
D) an automatic outcome of the process.

Question 13

The auditor must consider the possibility that the true population misstatement is greater than the amount of misstatement that is tolerable when the auditor is performing:

Accepted Answer

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

Question 14

Sampling used for tests of details of balances provides results in terms of exception rates.

Accepted Answer

A) True 
 B)False

Question 15

How might auditors include negative balances when using monetary unit sampling to evaluate a population?

Accepted Answer

There are two basic alternatives to test

Question 16

There are four steps to generalize from the sample to the population using difference estimation sampling.Identify each of these four steps.

Accepted Answer

The four steps to generalize from the sa

Question 17

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 18

If the population is not considered acceptable, one step the auditor is likely to take is to:

Accepted Answer

A) retest all internal controls. 
B) ask the client to adjust the account balance. 
C) test the entire population. 
D) decrease inherent risk. 
A) retest all internal controls. 
B) ask the client to adjust the account balance. 
C) test the entire population. 
D) decrease inherent risk.

Question 19

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 20

Discuss each of the six possible courses of action the auditor can take when he or she has concluded that the population is misstated by more than a tolerable amount.

Accepted Answer

The six possible courses of action the a

Exam 17: Audit Sampling for Tests of Details of Balances

Which of the following sampling plans would be designed to estimate a numerical measurement of a population, such as a dollar value?

In monetary unit sampling, the relationship between tolerable misstatement size and required sample size is:

Monetary unit sampling is not particularly effective at detecting:

When selecting a stratified sample, the sample size is:

There are 14 steps to audit sampling for details of balances, divided into three sections: plan the sample, select the sample and perform the audit procedures, and evaluate the results.Discuss each of the steps included in the "evaluate the results" section for nonstatistical sampling.

You are auditing Nelson and Company and determined that the sample results support a conclusion that the account is materially misstated, when in fact it was not misstated.This illustrates the risk of:

When using MUS, the projected misstatement is the percentage misstatement times the sampling interval.

When dealing with variables sampling and sampling risk, it is important to understand that:

The AICPA audit sampling formula for computing nonstatistical tests of details of balances sample size is to multiply the population recorded amount by the ________ and then divide by the ________.

ARIA measures the auditor's desired assurance for an account balance.

Which of the following item(s)are needed to determine the sample size using MUS?

When using monetary unit sampling, evaluating the likelihood of unrecorded items in the population is:

The auditor must consider the possibility that the true population misstatement is greater than the amount of misstatement that is tolerable when the auditor is performing:

Sampling used for tests of details of balances provides results in terms of exception rates.

How might auditors include negative balances when using monetary unit sampling to evaluate a population?

There are four steps to generalize from the sample to the population using difference estimation sampling.Identify each of these four steps.

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.

If the population is not considered acceptable, one step the auditor is likely to take is to:

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.

Discuss each of the six possible courses of action the auditor can take when he or she has concluded that the population is misstated by more than a tolerable amount.

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

Internal Control, Control Risk, and Section 404 Audits

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

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, Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

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

Filters

The AICPA audit sampling formula for computing nonstatistical tests of details of balances sample size is to multiply the population recorded amount by the and then divide by the .