Exam 17: Audit Sampling for Tests of Details of Balances

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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.

(True/False)

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Question 101

The allowance for sampling risk when no misstatements are found in the sample is

(Multiple Choice)

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Question 102

There are 14 steps to audit sampling for tests of 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.

(Essay)

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Question 103

You are auditing Raji and Company. You discover an item of inventory with an audited value of $5,000 with a recorded amount of $3,000. If this is the only error you discover, the projected misstatement for the sample would be

(Multiple Choice)

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Question 104

The confidence coefficients for ARIA are different from the confidence level.

(True/False)

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Question 105

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

(True/False)

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Question 106

The larger the sample size, the more confident the auditor can be that the point estimate is close to the true population value.

(True/False)

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Question 107

In monetary unit sampling, a sampling interval of 900 means that

(Multiple Choice)

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Question 108

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

(True/False)

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Question 109

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.

(True/False)

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Question 110

Sampling, not nonsampling risks, are important for tests of controls, substantive tests of transaction, and test of details of balances.

(True/False)

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Question 111

Which balance-related audit objective cannot be assessed using monetary unit sampling?

(Multiple Choice)

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Question 112

Auditors generally use rate of occurrence tests in tests of details of balances.

(True/False)

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Question 113

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

(True/False)

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Question 114

The population standard deviation has a significant effect on the computed precision interval.

(True/False)

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Question 115

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

(True/False)

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Question 116

If a population is not considered acceptable, and the analysis indicates an individual error is unique or most of the misstatements are of a specific type, it may be appropriate to restrict the additional audit effort to the problem area.

(True/False)

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Question 117

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

(True/False)

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Question 118

An estimate of the largest likely overstatement in a population at a given ARIA, using monetary unit sampling is the

(Multiple Choice)

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Question 119

If acceptable audit risk is increased, acceptable risk of incorrect acceptance should be

(Multiple Choice)

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Question 120

Showing 101 - 120 of 130

Exam 17: Audit Sampling for Tests of Details of Balances

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.

The allowance for sampling risk when no misstatements are found in the sample is

There are 14 steps to audit sampling for tests of 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 Raji and Company. You discover an item of inventory with an audited value of $5,000 with a recorded amount of $3,000. If this is the only error you discover, the projected misstatement for the sample would be

The confidence coefficients for ARIA are different from the confidence level.

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

The larger the sample size, the more confident the auditor can be that the point estimate is close to the true population value.

In monetary unit sampling, a sampling interval of 900 means that

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

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.

Sampling, not nonsampling risks, are important for tests of controls, substantive tests of transaction, and test of details of balances.

Which balance-related audit objective cannot be assessed using monetary unit sampling?

Auditors generally use rate of occurrence tests in tests of details of balances.

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

The population standard deviation has a significant effect on the computed precision interval.

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

If a population is not considered acceptable, and the analysis indicates an individual error is unique or most of the misstatements are of a specific type, it may be appropriate to restrict the additional audit effort to the problem area.

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

An estimate of the largest likely overstatement in a population at a given ARIA, using monetary unit sampling is the

If acceptable audit risk is increased, acceptable risk of incorrect acceptance should be

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

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

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