Question 1

Which of the following sampling plans would be designed to estimate a numerical measurement of a population,such as a dollar value?

Accepted Answer

A)  Numerical sampling 
B)  Discovery sampling 
C)  Attributes sampling 
D)  Variable sampling 
A)  Numerical sampling 
B)  Discovery sampling 
C)  Attributes sampling 
D)  Variable sampling

Question 2

If acceptable audit risk is increased,acceptable risk of incorrect acceptance should be:

Accepted Answer

A)  increased. 
B)  reduced. 
C)  unaffected. 
D)  modified. 
A)  increased. 
B)  reduced. 
C)  unaffected. 
D)  modified.

Question 3

When the sample selection is done using probability proportional to size sample selection (PPS):

Accepted Answer

A)  the actual number of units selected for testing may be more than the computed sample size. 
B)  the auditor must use systematic selection, rather than random selection of dollars. 
C)  population items with a zero recorded balance have no chance of being selected. 
D)  negative balances must be treated as positive balances. 
A)  the actual number of units selected for testing may be more than the computed sample size. 
B)  the auditor must use systematic selection, rather than random selection of dollars. 
C)  population items with a zero recorded balance have no chance of being selected. 
D)  negative balances must be treated as positive balances.

Question 4

Discuss the advantages and disadvantages of monetary-unit sampling over other sampling methods.

Accepted Answer

Advantages of monetary unit sampling:
•I

Question 5

You are auditing Raji and Company.You discover an item of inventory with an audited value of $5,000 with a recorded amount of $3,000.If this is the only error you discover the projected misstatement for the sample would be:

Accepted Answer

A)  $5,000. 
B)  $2,000. 
C)  $3,000. 
D)  $4,000. 
A)  $5,000. 
B)  $2,000. 
C)  $3,000. 
D)  $4,000.

Question 6

Both sampling and nonsampling risks are associated with:

Accepted Answer

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

Question 7

Acceptable risk of incorrect acceptance (ARIA)and sample size are inversely related; that is,as ARIA increases,sample size decreases.

Accepted Answer

A) True 
 B)False

Question 8

Tolerable misstatement is used to:

Accepted Answer

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

Question 9

An auditor using nonstatistical sampling cannot formally measure sampling error.

Accepted Answer

A) True 
 B)False

Question 10

Tests for rates of occurrence are appropriately used in all but which of the following situations?

Accepted Answer

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

Question 11

To determine the sampling interval,the population is divided by the confidence factor.

Accepted Answer

A) True 
 B)False

Question 12

Difference estimation frequently results in smaller sample sizes than any other variables sampling method.

Accepted Answer

A) True 
 B)False

Question 13

Stratified sampling is applicable to difference,mean-per-unit,and ratio estimation,but it is most commonly used with:

Accepted Answer

A)  ratio estimation. 
B)  discovery sampling. 
C)  difference estimation. 
D)  mean-per-unit estimation. 
A)  ratio estimation. 
B)  discovery sampling. 
C)  difference estimation. 
D)  mean-per-unit estimation.

Question 14

The auditors principal objective when using a sample of tests of details of balances is whether the:

Accepted Answer

A)  account balance being audited is fairly stated. 
B)  transactions being audited are free of misstatements. 
C)  controls being tested are operating effectively. 
D)  transactions and account balances being audited are fairly stated. 
A)  account balance being audited is fairly stated. 
B)  transactions being audited are free of misstatements. 
C)  controls being tested are operating effectively. 
D)  transactions and account balances being audited are fairly stated.

Which of the following sampling plans would be designed to estimate a numerical measurement of a population,such as a dollar value?

If acceptable audit risk is increased,acceptable risk of incorrect acceptance should be:

When the sample selection is done using probability proportional to size sample selection (PPS):

Discuss the advantages and disadvantages of monetary-unit sampling over other sampling methods.

You are auditing Raji and Company.You discover an item of inventory with an audited value of $5,000 with a recorded amount of $3,000.If this is the only error you discover the projected misstatement for the sample would be:

Both sampling and nonsampling risks are associated with:

Acceptable risk of incorrect acceptance (ARIA)and sample size are inversely related; that is,as ARIA increases,sample size decreases.

Tolerable misstatement is used to:

An auditor using nonstatistical sampling cannot formally measure sampling error.

Tests for rates of occurrence are appropriately used in all but which of the following situations?

To determine the sampling interval,the population is divided by the confidence factor.

Difference estimation frequently results in smaller sample sizes than any other variables sampling method.

Stratified sampling is applicable to difference,mean-per-unit,and ratio estimation,but it is most commonly used with:

The auditors principal objective when using a sample of tests of details of balances is whether the:

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

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

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

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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Exam 17: Audit Sampling for Tests of Details of Balances

Which of the following sampling plans would be designed to estimate a numerical measurement of a population,such as a dollar value?

If acceptable audit risk is increased,acceptable risk of incorrect acceptance should be:

When the sample selection is done using probability proportional to size sample selection (PPS):

Discuss the advantages and disadvantages of monetary-unit sampling over other sampling methods.

You are auditing Raji and Company.You discover an item of inventory with an audited value of $5,000 with a recorded amount of $3,000.If this is the only error you discover the projected misstatement for the sample would be:

Both sampling and nonsampling risks are associated with:

Acceptable risk of incorrect acceptance (ARIA)and sample size are inversely related; that is,as ARIA increases,sample size decreases.

Tolerable misstatement is used to:

An auditor using nonstatistical sampling cannot formally measure sampling error.

Tests for rates of occurrence are appropriately used in all but which of the following situations?

To determine the sampling interval,the population is divided by the confidence factor.

Difference estimation frequently results in smaller sample sizes than any other variables sampling method.

Stratified sampling is applicable to difference,mean-per-unit,and ratio estimation,but it is most commonly used with:

The auditors principal objective when using a sample of tests of details of balances is whether the:

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

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

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

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

Filters