Question 1

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 2

Acceptable risk of incorrect rejection is the statistical risk that the auditor has concluded that a population is materially misstated when it is not.

Accepted Answer

A) True 
 B)False

Question 3

The auditor uses monetary unit sampling to select a sample of expense items for testing from a population of expenses. Subsequent to selecting this sample of expense items, the client identifies additional expenses not included in the population and included in the audited financial statements. The auditor in this situation must include these additional expenses as part of the population subject to the sampling and select a revised sample of expense items for testing.

Accepted Answer

A) True 
 B)False

Question 4

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 5

The primary factor affecting the auditor's decision about acceptable risk of incorrect acceptance (ARIA) is assessed inherent risk.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Consider the steps in sampling for tests of details and for tests of controls. Explain the differences in applying sampling to these two types of tests.

Accepted Answer

The differ

Question 8

Why do auditors find MUS appealing?

Accepted Answer

A)  MUS increases the likelihood of selecting a balance of high and low dollar items. 
B)  MUS is easy to use in the audit environment. 
C)  MUS provides a nonstatistical, rather than a statistical, conclusion. 
D)  When misstatements are found, MUS rarely produces bounds in excess of materiality. 
A)  MUS increases the likelihood of selecting a balance of high and low dollar items. 
B)  MUS is easy to use in the audit environment. 
C)  MUS provides a nonstatistical, rather than a statistical, conclusion. 
D)  When misstatements are found, MUS rarely produces bounds in excess of materiality.

Question 9

When errors are found in a sample, auditors in practice generally assume

Accepted Answer

A)  that the population errors cannot be determined. 
B)  that the population errors are larger than the sample errors. 
C)  that the population errors are smaller than the sample errors. 
D)  that the actual sample errors are representative of the population errors. 
A)  that the population errors cannot be determined. 
B)  that the population errors are larger than the sample errors. 
C)  that the population errors are smaller than the sample errors. 
D)  that the actual sample errors are representative of the population errors.

Question 10

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.

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

Acceptable risk of incorrect rejection is the statistical risk that the auditor has concluded that a population is materially misstated when it is not.

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

The primary factor affecting the auditor's decision about acceptable risk of incorrect acceptance (ARIA) is assessed inherent risk.

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

Consider the steps in sampling for tests of details and for tests of controls. Explain the differences in applying sampling to these two types of tests.

Why do auditors find MUS appealing?

When errors are found in a sample, auditors in practice generally assume

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

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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Exam 17: Audit Sampling for Tests of Details of Balances

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

Acceptable risk of incorrect rejection is the statistical risk that the auditor has concluded that a population is materially misstated when it is not.

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

The primary factor affecting the auditor's decision about acceptable risk of incorrect acceptance (ARIA) is assessed inherent risk.

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

Consider the steps in sampling for tests of details and for tests of controls. Explain the differences in applying sampling to these two types of tests.

Why do auditors find MUS appealing?

When errors are found in a sample, auditors in practice generally assume

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

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