Exam 18: Attributes Sampling

When testing internal controls,which of the following statements is not true with respect to the use of nonstatistical sampling?

Judgments about the frequency of control deviations that identify a particular control risk level are related to

In each of the following situations,indicate whether a fixed (F),sequential (S),or discovery (D)attributes sampling plan is being used. ____ 1.The audit team has determined the tolerable rate of deviation to be 5%,the risk of overreliance to be 10%,and the expected population deviation rate to be zero. ____ 2.Based on the risk of overreliance,expected population deviation rate and tolerable rate of deviation,the audit team examined a sample of 50 items before determining if additional items should be included in the sample. ____ 3.Using the AICPA Sample Size tables,the audit team determined the appropriate sample size and selected the sample items.However,the audit team stopped the examination after a deviation was found. ____ 4.The audit team established the risk of overreliance to be 5%,the tolerable rate of deviation to be 4%,and the expected population deviation rate to be 3%.Using the AICPA Sample Size tables,the audit team decided to sample over 1,000 items. ____ 5.The audit team is performing a sampling application to evaluate the operating effectiveness of an entity's internal controls.The application used could provide a more efficient method of examination,but it is important that the audit team evaluate the sample in the order they were selected.

As a result of tests of controls,an auditor assessed control risk too low and decreased the effectiveness of her substantive procedures.This assessment occurred because the true deviation rate in the population was

Which of the following is not true with respect to the use of nonstatistical sampling?

An auditor who uses statistical sampling for attributes in testing internal controls should reduce the planned reliance on a prescribed control when the

On the basis of attributes sampling,an auditor decided to increase the assessed level of control risk from the level originally planned.To achieve an overall audit risk level that is substantially the same as the original planned level of audit risk,the auditor would

The ultimate purpose of control risk assessment is to

An auditor's determination of a lower level of control risk would most likely be associated with

In the study of internal control,the auditor uses sampling to compare the ____ to the _____.

Which of the following would not be an example of nonsampling risk in an attributes sampling application?

Indicate how each of the following conditions affect the upper limit rate of deviation by using the letters I (increase),D (decrease),or N (no effect).For each condition,hold all other factors constant. ____ 1.An increase in the tolerable rate of deviation from 2% to 5%. ____ 2.A decrease in the number of deviations from 5 to 1. ____ 3.An increase in the risk of underreliance from 5% to 10%. ____ 4.A decrease in the risk of overreliance from 10% to 5%. ____ 5.An increase in the sample rate of deviation from 2.3% to 3.5%.

Which of the following is the audit team's primary objective in selecting an attributes sampling selection method?

As a result of sampling procedures applied as tests of controls,an auditor incorrectly assesses control risk lower than appropriate.The most likely explanation for this situation is that

Based on relationships among these factors,identify the missing data for each of the following independent attributes sampling applications.

Which of the following statements is true when selecting a sample of invoices from a population to perform tests of controls?

If an auditor calculated an upper limit rate of deviation of 5% when the tolerable rate of deviation was 4%,the auditor would conclude that

Lincoln,CPA,selected a sample of 100 items by dividing the population of 100,000 sales invoices by 100.With a random start,she then selected every 1,000^th invoice.This selection process is referred to as

Which of the following deviations would probably be of most concern to auditors?

Using the appropriate sampling tables,identify the missing data for each of the following independent attributes sampling applications.