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

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The sum of the tolerable exception rate and the estimated population exception rate is the precision of the initial sample estimate.

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Question 1

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Describe each of the four types of sample selection methods commonly associated with statistical audit sampling.

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Question 2

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Four types of sample selection methods commonly associated with statistical audit sampling are:
• Simple random sample selection. Every possible combination of elements in the population has an equal chance of being included in the sample.
• Systematic sample selection. A probabilistic method of sampling in which the auditor calculates an interval (the population size divided by the number of sample items desired) and selects the items for the sample based on the size of the interval and a randomly selected number between zero and the interval size.
• Probability proportional to size sample selection. The probability of selecting any individual population item is proportional to its recorded amount.
• Stratified sample selection. A probabilistic method of sampling in which the population is divided into subpopulations, and samples are taken from each of the subpopulations.

The sample exception rate equals

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Question 3

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Discuss what is meant by "sampling risk" and "nonsampling risk."

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Question 4

In using audit sampling for exception rates

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Question 5

One of the causes of nonsampling risk is

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Question 6

Which of the following statements is correct when dealing with sampling for exception rates?

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Question 7

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

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Question 8

Which of the following would have the least impact in determining sample size?

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Question 9

A sample of all items in a population will have a zero sampling risk.

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Question 10

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

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Question 11

The process which requires the calculation of an interval and then selects the items based on the size of the interval is

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Question 12

Which of the following is a correct statement regarding block sampling?

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Question 13

When planning the sample,

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Question 14

It is never possible to know whether a sample is truly representative of a population.

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Question 15

List the two ways auditors can control sampling risk.

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Question 16

Audit sampling can be applied to manual controls when application of the control produces documentary evidence of performance.

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Question 17

Assume the auditor decides a control is not effective if there is a population exception rate of 3%. Assume the auditor accepts this control as effective based on test of control with a sample of 100 items that had 2 exceptions. If the population actually has a 6% exception rate, the auditor correctly accepted the population because the sample was representative of the population.

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Question 18

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

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Question 19

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

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Question 20

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

The sum of the tolerable exception rate and the estimated population exception rate is the precision of the initial sample estimate.

Describe each of the four types of sample selection methods commonly associated with statistical audit sampling.

The sample exception rate equals

Discuss what is meant by "sampling risk" and "nonsampling risk."

In using audit sampling for exception rates

One of the causes of nonsampling risk is

Which of the following statements is correct when dealing with sampling for exception rates?

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

Which of the following would have the least impact in determining sample size?

A sample of all items in a population will have a zero sampling risk.

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

The process which requires the calculation of an interval and then selects the items based on the size of the interval is

Which of the following is a correct statement regarding block sampling?

When planning the sample,

It is never possible to know whether a sample is truly representative of a population.

List the two ways auditors can control sampling risk.

Audit sampling can be applied to manual controls when application of the control produces documentary evidence of performance.

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

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

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 Materiality

Assessing the Risk of Material Misstatement

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, 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

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