Question 1

The set of items about which a conclusion is made in a sampling application is referred to as a(n)

Accepted Answer

A)  sampling unit. 
B)  sample. 
C)  population unit. 
D)  population. 
A)  sampling unit. 
B)  sample. 
C)  population unit. 
D)  population.

Question 2

When examining the client's internal control,what is the relationship of each of the following with sample size?

Accepted Answer

A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D 
A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D

Question 3

Which of the following characteristics of substantive procedures is most closely associated with the use of sampling?

Accepted Answer

A)  Extent of further audit procedures 
B)  Nature of further audit procedures 
C)  Timing of further audit procedures 
D)  All of these are closely associated with the use of sampling 
A)  Extent of further audit procedures 
B)  Nature of further audit procedures 
C)  Timing of further audit procedures 
D)  All of these are closely associated with the use of sampling

Question 4

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

Accepted Answer

A)  adjusted estimate of misstatement; overall materiality 
B)  sampling risk; precision 
C)  adjusted estimate of the deviation rate; tolerable rate of deviation 
D)  precision interval; upper limit on misstatement 
A)  adjusted estimate of misstatement; overall materiality 
B)  sampling risk; precision 
C)  adjusted estimate of the deviation rate; tolerable rate of deviation 
D)  precision interval; upper limit on misstatement

Question 5

The precision interval has a ____ percent probability of including the ____.

Accepted Answer

A)  sampling risk; adjusted sample estimate 
B)  sampling risk; true population value 
C)  1 minus sampling risk; adjusted sample estimate 
D)  1 minus sampling risk; true population value 
A)  sampling risk; adjusted sample estimate 
B)  sampling risk; true population value 
C)  1 minus sampling risk; adjusted sample estimate 
D)  1 minus sampling risk; true population value

Question 6

Below are statements or examples related to audit sampling applications.Indicate,using the correct letter,which concept is most closely associated with the statement or example.Each concept may be related to more than one statement or example.
A. Statistical sampling.
B. Nonstatistical sampling.
C. Sampling risk.
D. Nonsampling risk.
___ 1. Jones, CPA, selected a sample and evaluated the results of her sample using the laws of probability.
___ 2. Wilson, CPA, checked to see if any signature was in the credit approval box on a sample of sales orders rather than looking for only authorized signatures.
___ 3. Based on a statistical sample, Jackson, CPA, concluded the client's control was functioning effectively when the deviation rate in the population was actually unacceptable.
___ 4. Barnum, CPA, selected all invoices over $1,000 and all invoices recorded on the 15th of each month for his sample.
___ 5. When a client could not produce an invoice for a sample selected by the auditor, the auditor accepted the client's assurance that the invoice contained the appropriate approval.

Accepted Answer

Question 7

Which of the following steps in the sampling process is ordinarily performed last?

Accepted Answer

A)  Determine the objective of sampling. 
B)  Measure sample items. 
C)  Evaluate the sample results. 
D)  Define the characteristic of interest. 
A)  Determine the objective of sampling. 
B)  Measure sample items. 
C)  Evaluate the sample results. 
D)  Define the characteristic of interest.

Question 8

Auditors use attributes sampling in assessing the effectiveness of a client's internal controls to determine

Accepted Answer

A)  the extent to which internal controls are operating as intended to prevent or detect misstatements. 
B)  the degree of inherent risk associated with various account balances or classes of transactions. 
C)  the degree of risk present in the client's business environment. 
D)  the accuracy of the client's account balances or classes of transactions. 
A)  the extent to which internal controls are operating as intended to prevent or detect misstatements. 
B)  the degree of inherent risk associated with various account balances or classes of transactions. 
C)  the degree of risk present in the client's business environment. 
D)  the accuracy of the client's account balances or classes of transactions.

Question 9

Which of the following is not correct with respect to sample size?

Accepted Answer

A)  In a statistical sampling application, the determination of sample size is used to control the auditor's exposure to sampling risk. 
B)  As the desired level of sampling risk decreases, the necessary sample size decreases. 
C)  Auditors determine sample size after defining the characteristic of interest and the population of interest. 
D)  As the expected misstatement (or expected rate of deviation) increases, the necessary sample size increases. 
A)  In a statistical sampling application, the determination of sample size is used to control the auditor's exposure to sampling risk. 
B)  As the desired level of sampling risk decreases, the necessary sample size decreases. 
C)  Auditors determine sample size after defining the characteristic of interest and the population of interest. 
D)  As the expected misstatement (or expected rate of deviation) increases, the necessary sample size increases.

Question 10

Select the description that best illustrates sampling risk.

Accepted Answer

A)  Applying audit procedures, which are inappropriate for the audit objectives 
B)  Failing to recognize misstatements or deviations in the documents examined 
C)  Arriving at incorrect statistical conclusions due to computational errors 
D)  Choosing a sample which has proportionately more errors than the population 
A)  Applying audit procedures, which are inappropriate for the audit objectives 
B)  Failing to recognize misstatements or deviations in the documents examined 
C)  Arriving at incorrect statistical conclusions due to computational errors 
D)  Choosing a sample which has proportionately more errors than the population

Question 11

Which of the following is not a criterion for using a selection method with statistical sampling?

Accepted Answer

A)  The method provides a reasonable likelihood of selecting a representative sample. 
B)  The method allows the probability of selecting sample items to be determined. 
C)  The method specifically identifies each item in the population with a number. 
D)  The method allows the selection process to be replicated. 
A)  The method provides a reasonable likelihood of selecting a representative sample. 
B)  The method allows the probability of selecting sample items to be determined. 
C)  The method specifically identifies each item in the population with a number. 
D)  The method allows the selection process to be replicated.

Question 12

Jones,CPA,is performing a sampling application to determine the average number of patrons attending the performance of a musical on a weeknight.She randomly selects five weeknight performances during the month of May and calculates an average of 230 patrons per performance,with an associated precision of 25 patrons.This precision is determined based on a confidence level of 95 percent.
A.What is Jones' exposure to sampling risk?
B.What is the precision interval associated with Jones' sample?
C.Provide an explanation of the sampling interval calculated in (b)above.
D.If theaters needed an average attendance of 200 patrons per weeknight to remain profitable,what would Jones' conclusion be with respect to this question?

Accepted Answer

A.The exposure to sampling risk is 5 per

Question 13

If the upper limit rate of deviation exceeds the tolerable rate of deviation,the auditor would most likely

Accepted Answer

A)  accept the account balance as fairly stated. 
B)  reject the account balance as fairly stated. 
C)  increase the planned effectiveness of substantive procedures. 
D)  not increase the planned effectiveness of substantive procedures. 
A)  accept the account balance as fairly stated. 
B)  reject the account balance as fairly stated. 
C)  increase the planned effectiveness of substantive procedures. 
D)  not increase the planned effectiveness of substantive procedures.

Question 14

Which of the following components of the audit risk model is most closely associated with variables sampling?

Accepted Answer

A)  Audit risk 
B)  Risk of material misstatement 
C)  Detection risk 
D)  Analytical procedures risk 
A)  Audit risk 
B)  Risk of material misstatement 
C)  Detection risk 
D)  Analytical procedures risk

Question 15

Fishkin,CPA,is attempting to determine whether the average height of a player on a basketball team is greater than 80 inches.Based on his sample of basketball players,he determined an estimate of 76 inches with an associated precision of 10 inches.The confidence in this estimate is 90 percent.
A.What is the precision interval associated with Fishkin's sample?
B.Based on this sampling interval,what is Fishkin's conclusion?
C.If Fishkin wanted a higher level of confidence in his sample estimate,would the precision be more or less than 10 inches?

Accepted Answer

A.The precision interval is 66 inches to

Question 16

After the auditor has defined the population to be examined,the next step would be to

Accepted Answer

A)  define the characteristic of interest. 
B)  select the sample items. 
C)  determine the sample size. 
D)  measure the sample items. 
A)  define the characteristic of interest. 
B)  select the sample items. 
C)  determine the sample size. 
D)  measure the sample items.

Question 17

Which of the following has a direct relationship with sample size in a variables sampling application?

Accepted Answer

A)  Tolerable misstatement: Yes; Expected error: Yes 
B)  Tolerable misstatement: Yes; Expected error: No 
C)  Tolerable misstatement: No; Expected error: Yes 
D)  Tolerable misstatement: No; Expected error: No 
A)  Tolerable misstatement: Yes; Expected error: Yes 
B)  Tolerable misstatement: Yes; Expected error: No 
C)  Tolerable misstatement: No; Expected error: Yes 
D)  Tolerable misstatement: No; Expected error: No

Question 18

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

Accepted Answer

A)  Statistical sampling allows the auditor to quantitatively measure the sufficiency of evidence gathered. 
B)  Statistical sampling does not require auditors to utilize extensive judgment during the sampling process. 
C)  Statistical sampling allows the auditor to make quantitative statements with respect to the results of the sampling procedures. 
D)  Both statistical and nonstatistical sampling are permissible under generally accepted auditing standards. 
A)  Statistical sampling allows the auditor to quantitatively measure the sufficiency of evidence gathered. 
B)  Statistical sampling does not require auditors to utilize extensive judgment during the sampling process. 
C)  Statistical sampling allows the auditor to make quantitative statements with respect to the results of the sampling procedures. 
D)  Both statistical and nonstatistical sampling are permissible under generally accepted auditing standards.

Question 19

Why is the auditor more concerned with the risk of assessing control risk too low rather than the risk of assessing control risk too high?

Accepted Answer

A)  The risk of assessing control risk too high is not a type of sampling risk. 
B)  The risk of assessing control risk too low exposes the auditor to an efficiency loss. 
C)  The risk of assessing control risk too low may result in the auditor failing to perform sufficient substantive procedures. 
D)  The risk of assessing control risk too low cannot be measured by the auditor during the sampling process. 
A)  The risk of assessing control risk too high is not a type of sampling risk. 
B)  The risk of assessing control risk too low exposes the auditor to an efficiency loss. 
C)  The risk of assessing control risk too low may result in the auditor failing to perform sufficient substantive procedures. 
D)  The risk of assessing control risk too low cannot be measured by the auditor during the sampling process.

Question 20

Which of the following statements is true with regard to sampling?

Accepted Answer

A)  Sampling can only be used in situations in which the population is relatively homogenous in nature. 
B)  Sampling is typically more efficient than examining the entire population. 
C)  Sampling is typically more effective than examining the entire population. 
D)  Sampling should be used when the need for more precise information is important. 
A)  Sampling can only be used in situations in which the population is relatively homogenous in nature. 
B)  Sampling is typically more efficient than examining the entire population. 
C)  Sampling is typically more effective than examining the entire population. 
D)  Sampling should be used when the need for more precise information is important.

The set of items about which a conclusion is made in a sampling application is referred to as a(n)

When examining the client's internal control,what is the relationship of each of the following with sample size?

Which of the following characteristics of substantive procedures is most closely associated with the use of sampling?

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

The precision interval has a percent probability of including the .

Which of the following steps in the sampling process is ordinarily performed last?

Auditors use attributes sampling in assessing the effectiveness of a client's internal controls to determine

Which of the following is not correct with respect to sample size?

Select the description that best illustrates sampling risk.

Which of the following is not a criterion for using a selection method with statistical sampling?

If the upper limit rate of deviation exceeds the tolerable rate of deviation,the auditor would most likely

Which of the following components of the audit risk model is most closely associated with variables sampling?

After the auditor has defined the population to be examined,the next step would be to

Which of the following has a direct relationship with sample size in a variables sampling application?

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

Why is the auditor more concerned with the risk of assessing control risk too low rather than the risk of assessing control risk too high?

Which of the following statements is true with regard to sampling?

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Audits governmental Audits and Fraud Examinations

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Exam 17: Overview of Sampling

The set of items about which a conclusion is made in a sampling application is referred to as a(n)

When examining the client's internal control,what is the relationship of each of the following with sample size?

Which of the following characteristics of substantive procedures is most closely associated with the use of sampling?

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

The precision interval has a ____ percent probability of including the ____.

Which of the following steps in the sampling process is ordinarily performed last?

Auditors use attributes sampling in assessing the effectiveness of a client's internal controls to determine

Which of the following is not correct with respect to sample size?

Select the description that best illustrates sampling risk.

Which of the following is not a criterion for using a selection method with statistical sampling?

If the upper limit rate of deviation exceeds the tolerable rate of deviation,the auditor would most likely

Which of the following components of the audit risk model is most closely associated with variables sampling?

After the auditor has defined the population to be examined,the next step would be to

Which of the following has a direct relationship with sample size in a variables sampling application?

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

Why is the auditor more concerned with the risk of assessing control risk too low rather than the risk of assessing control risk too high?

Which of the following statements is true with regard to sampling?

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Audits governmental Audits and Fraud Examinations

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

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

The precision interval has a percent probability of including the .