Exam 9: Audit Sampling: An Application to Substantive Tests of Account Balances

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Match each factor of sample size to (1)its relationship to sample size (A-Direct or B-Inverse)and (2)the appropriate effect on the sample size if the factor increases (C-Increase or D-Decrease). 1. Tolerable misstatement 2. Population size 3. Desired confidence level 4. Expected misstatement

(Short Answer)

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Question 41

For monetary-unit sampling, the number of items tested is:

(Multiple Choice)

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Question 42

In nonstatistical sampling, describe the two methods auditors use to project sample results to the population. How does an auditor determine which method to use?

(Essay)

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Question 43

Monetary-unit sampling is commonly used by auditors to test controls.

(True/False)

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Question 44

Which of the following statements best describes an inherent limitation of the monetary-unit sampling method?

(Multiple Choice)

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Question 45

The objective of monetary-unit sampling is to test the assertion that no material misstatements exist in an account balance or class of transactions.

(True/False)

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Question 46

You are auditing accounts receivable for a small company and have found the following results: Use ratio projection to project your results.

(Essay)

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Question 47

Match the following. -MUS Sampling unit

(Multiple Choice)

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Question 48

In a monetary-unit sample with a sampling interval of $5,000, an auditor discovers that a selected account receivable with a recorded amount of $10,000 has an audit amount of $8,000. If this were the only error discovered by the auditor, the projected misstatement for this sample would be:

(Multiple Choice)

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Question 49

An auditor is preparing to sample an entity's customer receivables for overstatement. A statistical sampling method that automatically provides stratification when using systematic selection is:

(Multiple Choice)

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Question 50

In applying classical variables sampling, an auditor attempts to:

(Multiple Choice)

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Question 51

What is one advantage and one disadvantage of classical variables sampling?

(Essay)

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Question 52

In monetary-unit sampling, population size is:

(Multiple Choice)

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Question 53

Showing 41 - 53 of 53

Match each factor of sample size to (1)its relationship to sample size (A-Direct or B-Inverse)and (2)the appropriate effect on the sample size if the factor increases (C-Increase or D-Decrease). 1. Tolerable misstatement 2. Population size 3. Desired confidence level 4. Expected misstatement

For monetary-unit sampling, the number of items tested is:

In nonstatistical sampling, describe the two methods auditors use to project sample results to the population. How does an auditor determine which method to use?

Monetary-unit sampling is commonly used by auditors to test controls.

Which of the following statements best describes an inherent limitation of the monetary-unit sampling method?

The objective of monetary-unit sampling is to test the assertion that no material misstatements exist in an account balance or class of transactions.

You are auditing accounts receivable for a small company and have found the following results: Use ratio projection to project your results.

Match the following. -MUS Sampling unit

In a monetary-unit sample with a sampling interval of $5,000, an auditor discovers that a selected account receivable with a recorded amount of $10,000 has an audit amount of $8,000. If this were the only error discovered by the auditor, the projected misstatement for this sample would be:

An auditor is preparing to sample an entity's customer receivables for overstatement. A statistical sampling method that automatically provides stratification when using systematic selection is:

In applying classical variables sampling, an auditor attempts to:

What is one advantage and one disadvantage of classical variables sampling?

In monetary-unit sampling, population size is:

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning, Types of Audit Tests, and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Auditing the Inventory Management Process

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting Process: Long-Term Liabilities, Stockholders' Equity, and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Professional Conduct, Independence, and Quality Control

Legal Liability

Assurance, Attestation, and Internal Auditing Services

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