Exam 19: Variables Sampling

In a classical variables sampling application,the sample size will be smaller when the

Which of the following expresses the relationship between changes in the factors and changes in sample size in variables sampling?

As the expected misstatement is large relative to the tolerable misstatement,the audit team would most likely

Below are some of the specific activities performed in a monetary unit sampling application.Match the major step in monetary unit sampling application is most closely associated with the specific activity.Each step is associated with only one activity.

SCA is auditing a client's accounts receivable balance recorded at $10 million using MUS sampling.The following parameters have been established for this account: • Tolerable misstatement = $500,000 • Expected misstatement = $100,000 • Risk of incorrect acceptance = 10% Which of the following statements would not be true with respect to the sample size in this situation?

Which of the following is considered to be an advantage of monetary unit sampling compared to classical variables sampling?

Brown,CPA,was using monetary unit sampling to audit an inventory of $3,000,000 that was comprised of 6,000 items.A sample size of 500 was determined and a tolerable misstatement of $20,000 was established.The sampling interval would be

What is the appropriate sampling interval?

Which of the following courses of action would an auditor most likely follow in planning a sample of cash disbursements if the auditor is aware of several unusually large cash disbursements?

Which of the following is the least likely outcome when the upper limit on misstatements exceeds the tolerable misstatement?

Auditors are evaluating an account with a recorded balance of $700,000 using classical variables sampling.Based on an allowable risk of incorrect acceptance of 10%,the auditors have determined the following: • Estimated account balance = $640,000 • Precision = $20,000 • Tolerable misstatement = $50,000 Which of the following best describes the auditors' decision and rationale for that decision?

You are planning to use monetary unit sampling to evaluate accounts receivable for Violet Company.The accounts receivable account totals $3,000,000.You have assessed a risk of incorrect acceptance of 5%,a tolerable misstatement of $120,000,and an expected misstatement of $24,000. a.Calculate the sample size and sampling interval. b.Regardless of your answer to (a),use a sample size of 125 and the related sampling interval and calculate the upper limit on misstatements assuming you found the following differences.

Which of the following would not result in a lower level of the risk of incorrect acceptance?

Pujols,CPA,performed a nonstatistical sampling plan to examine the inventory balances of Wieserbud Brewing Inc.,and estimated the account balance based on the ratio of audited value to recorded balances.He audited 120 items from a sample and found an audited value of $24,600.The sample had a recorded value of $30,000.If the entire inventory contained 2,400 items and the total recorded value of the inventory was $480,000,the estimated account balance using nonstatistical methods is

Which of the following is not true with respect to the risk of incorrect rejection?

Which of the following selection methods selects individual dollars within an account balance or class of transactions for examination?

In classical variables sampling,a measure of the variability of the population is known as the

When performing substantive procedures,auditors run the sampling risk(s)of

In a classical variables sampling application,the auditor determines there is a 95 percent probability that the true (but unknown)value of an entity's accounts receivable is between $45,000 and $55,000.If the estimated population value is $50,000,the precision is

When the _____ exceeds the _____,the audit team is exposed to the risk of incorrect acceptance.