Exam 15: Audit Sampling for Tests of Controls and Substantive Tests of Transactions

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If the auditor concludes that the CUER is 5% at a 8% sampling risk,this means that the exception rate in the population is no greater than 5% with an 8% risk of the exception rate exceeding 5%.

(True/False)

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Question 21

Describe the differences between statistical and nonstatistical sampling in terms of (1)the sample selection methods used,and (2)quantification of sampling risk.

(Essay)

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Question 22

Statistical sampling eliminates any professional judgment for the auditor.

(True/False)

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Question 23

The difference between the tolerable exception rate and the estimated population exception rate is called:

(Multiple Choice)

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Question 24

Which of the following methods of sample selection is appropriately used when selecting a random sample?

(Multiple Choice)

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Question 25

Sampling risk may be controlled by:

(Multiple Choice)

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Question 26

When the computed upper exception rate is greater than the tolerable exception rate,it is necessary for the auditor to take specific action.Which of the following courses of action would be most difficult to justify?

(Multiple Choice)

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Question 27

The sample exception rate equals:

(Multiple Choice)

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Question 28

There is a(n)________ relationship between acceptable risk of overreliance and planned sample size.

(Multiple Choice)

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Question 29

The auditor must use the same TER and ARO levels for all attributes of an audit test.

(True/False)

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Question 30

Explain the effect on sample size of increasing each of the following: (1)tolerable exception rate,(2)estimated population exception rate,(3)acceptable risk of overreliance,and (4)population size.

(Essay)

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Question 31

If a particular internal control is not followed by the client exactly 6% of the time,and the auditor's tests of that control find three control violations in a sample of 50,the sample is considered to be representative.

(True/False)

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Question 32

When analyzing exceptions,the auditor should keep in mind that:

(Multiple Choice)

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Question 33

In using audit sampling for exception rates:

(Multiple Choice)

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Question 34

You are determining the appropriate sample size to test accounts receivable.What three factors are the most important to consider?

(Essay)

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Question 35

Although systematic sample selection is easy to use,its primary disadvantage is that it is not a probabilistic sampling method.

(True/False)

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Question 36

The conjoined sample exception rate is the auditor's "best estimate" of the actual exception rate in the entire population.

(True/False)

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Question 37

You are determining the significance of the following: you set a 5% risk of assessing control risk to low and your computation of the upper deviation risk is 7%.What could you conclude?

(Multiple Choice)

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Question 38

Which of the following statements best expresses the impact that the performance of audit procedures has on statistical vs.nonstatistical sampling?

(Multiple Choice)

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Question 39

When using nonstatistical sampling,the sample must be a probabilistic one.

(True/False)

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Question 40

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Exam 15: Audit Sampling for Tests of Controls and Substantive Tests of Transactions

If the auditor concludes that the CUER is 5% at a 8% sampling risk,this means that the exception rate in the population is no greater than 5% with an 8% risk of the exception rate exceeding 5%.

Describe the differences between statistical and nonstatistical sampling in terms of (1)the sample selection methods used,and (2)quantification of sampling risk.

Statistical sampling eliminates any professional judgment for the auditor.

The difference between the tolerable exception rate and the estimated population exception rate is called:

Which of the following methods of sample selection is appropriately used when selecting a random sample?

Sampling risk may be controlled by:

When the computed upper exception rate is greater than the tolerable exception rate,it is necessary for the auditor to take specific action.Which of the following courses of action would be most difficult to justify?

The sample exception rate equals:

There is a(n)________ relationship between acceptable risk of overreliance and planned sample size.

The auditor must use the same TER and ARO levels for all attributes of an audit test.

Explain the effect on sample size of increasing each of the following: (1)tolerable exception rate,(2)estimated population exception rate,(3)acceptable risk of overreliance,and (4)population size.

If a particular internal control is not followed by the client exactly 6% of the time,and the auditor's tests of that control find three control violations in a sample of 50,the sample is considered to be representative.

When analyzing exceptions,the auditor should keep in mind that:

In using audit sampling for exception rates:

You are determining the appropriate sample size to test accounts receivable.What three factors are the most important to consider?

Although systematic sample selection is easy to use,its primary disadvantage is that it is not a probabilistic sampling method.

The conjoined sample exception rate is the auditor's "best estimate" of the actual exception rate in the entire population.

You are determining the significance of the following: you set a 5% risk of assessing control risk to low and your computation of the upper deviation risk is 7%.What could you conclude?

Which of the following statements best expresses the impact that the performance of audit procedures has on statistical vs.nonstatistical sampling?

When using nonstatistical sampling,the sample must be a probabilistic one.

The Assurance Services Market

The Audit Standards Setting Process

Audit Reports

Legal Liability Considerations for Auditors

Ethics and the Audit Profession

Audit Responsibilities and Objectives

Nature and Type of Audit Evidence

Audit Planning

Considering Materiality and Audit Risk

Considering Internal Control

Considering the Risk of Fraud

Implications of Information Technology for the Audit Process

Developing the Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

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 Inventory and Warehousing Cycle

Audit of the Payroll and Personnel Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Audit Completion

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

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