Question 1

In estimating the population misstatement, the first step in projecting from the sample to the population is to:

Accepted Answer

A) make a point estimate. 
B) revise the upper error bound. 
C) calculate the precision interval. 
D) determine the population mean. 
A) make a point estimate. 
B) revise the upper error bound. 
C) calculate the precision interval. 
D) determine the population mean.

Question 2

One of the steps involved in planning the sample for the tests of details of balances is to:

Accepted Answer

A) select the sample. 
B) perform the audit procedures. 
C) define a misstatement. 
D) analyze the misstatements. 
A) select the sample. 
B) perform the audit procedures. 
C) define a misstatement. 
D) analyze the misstatements.

Question 3

When making statistical inferences, the auditor must remember that:

Accepted Answer

A) the true population value must always be known. 
B) auditors can state the conclusions drawn from a confidence interval in different ways. 
C) there can be no possibility that the sample is not sufficiently representative of the population. 
D) the knowledge of sampling distributions does not help the auditors to draw statistical conclusions. 
A) the true population value must always be known. 
B) auditors can state the conclusions drawn from a confidence interval in different ways. 
C) there can be no possibility that the sample is not sufficiently representative of the population. 
D) the knowledge of sampling distributions does not help the auditors to draw statistical conclusions.

Question 4

An important statistic to consider when using a statistical sampling audit plan is the population variability.The population variability is measured by the:

Accepted Answer

A) sample mean. 
B) standard deviation. 
C) standard error of the sample mean. 
D) estimated population total minus the actual population. 
A) sample mean. 
B) standard deviation. 
C) standard error of the sample mean. 
D) estimated population total minus the actual population.

Question 5

Explain acceptable risk of incorrect acceptance and acceptable risk of incorrect rejection within the context of variables sampling.

Accepted Answer

After an audit test is performed and sta

Question 6

The confidence limits in variables sampling are similar to the_________ in monetary-unit sampling.

Accepted Answer

A) point estimate 
B) misstatement bounds 
C) standard deviation 
D) standard error of the mean 
A) point estimate 
B) misstatement bounds 
C) standard deviation 
D) standard error of the mean

Question 7

Which of the following is a correct statement?

Accepted Answer

A) When internal controls are effective, control risk can be reduced, and therefore the auditor will decrease the ARIA. 
B) There is a direct relationship between ARIA and the required sample size. 
C) A lower control risk risk requires a lower ARO in testing the controls. 
D) ARO measures the auditor's desired assurance for an account balance. 
A) When internal controls are effective, control risk can be reduced, and therefore the auditor will decrease the ARIA. 
B) There is a direct relationship between ARIA and the required sample size. 
C) A lower control risk risk requires a lower ARO in testing the controls. 
D) ARO measures the auditor's desired assurance for an account balance.

Question 8

Acceptable risk of incorrect acceptance (ARIA)and sample size are inversely related; that is, as ARIA increases, sample size decreases.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following does not have to be considered in determining the initial sample size of a test of details?

Accepted Answer

A) Tolerable misstatement 
B) Acceptable risk of incorrect rejection 
C) Estimate of misstatements in the population 
D) Acceptable audit risk 
A) Tolerable misstatement 
B) Acceptable risk of incorrect rejection 
C) Estimate of misstatements in the population 
D) Acceptable audit risk

Question 10

When using difference estimation, the precision interval is calculated by a statistical formula.

Accepted Answer

A) True 
 B)False

Question 11

Both sampling and nonsampling risks are associated with:

Accepted Answer

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

Question 12

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 13

The purpose of stratification is to permit auditors to emphasize certain aspects of a population and deemphasize others.

Accepted Answer

A) True 
 B)False

Question 14

If the misstatement in a population is larger then tolerable misstatement without considering sampling error, the population will be considered unacceptable.

Accepted Answer

A) True 
 B)False

In estimating the population misstatement, the first step in projecting from the sample to the population is to:

One of the steps involved in planning the sample for the tests of details of balances is to:

When making statistical inferences, the auditor must remember that:

An important statistic to consider when using a statistical sampling audit plan is the population variability.The population variability is measured by the:

Explain acceptable risk of incorrect acceptance and acceptable risk of incorrect rejection within the context of variables sampling.

The confidence limits in variables sampling are similar to the_________ in monetary-unit sampling.

Which of the following is a correct statement?

Acceptable risk of incorrect acceptance (ARIA)and sample size are inversely related; that is, as ARIA increases, sample size decreases.

Which of the following does not have to be considered in determining the initial sample size of a test of details?

When using difference estimation, the precision interval is calculated by a statistical formula.

Both sampling and nonsampling risks are associated with:

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

The purpose of stratification is to permit auditors to emphasize certain aspects of a population and deemphasize others.

If the misstatement in a population is larger then tolerable misstatement without considering sampling error, the population will be considered unacceptable.

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

Exam 17: Audit Sampling for Tests of Details of Balances

In estimating the population misstatement, the first step in projecting from the sample to the population is to:

One of the steps involved in planning the sample for the tests of details of balances is to:

When making statistical inferences, the auditor must remember that:

An important statistic to consider when using a statistical sampling audit plan is the population variability.The population variability is measured by the:

Explain acceptable risk of incorrect acceptance and acceptable risk of incorrect rejection within the context of variables sampling.

The confidence limits in variables sampling are similar to the_________ in monetary-unit sampling.

Which of the following is a correct statement?

Acceptable risk of incorrect acceptance (ARIA)and sample size are inversely related; that is, as ARIA increases, sample size decreases.

Which of the following does not have to be considered in determining the initial sample size of a test of details?

When using difference estimation, the precision interval is calculated by a statistical formula.

Both sampling and nonsampling risks are associated with:

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

The purpose of stratification is to permit auditors to emphasize certain aspects of a population and deemphasize others.

If the misstatement in a population is larger then tolerable misstatement without considering sampling error, the population will be considered unacceptable.

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