Question 1

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

Accepted Answer

1.195; 2.5%; 3.10%; 4.2.5%

Question 2

Lower levels of control risk are associated with ______________________ sample sizes for substantive procedures.

Accepted Answer

smaller (or lower

Question 3

An auditor who increases the assessed level of control risk because certain control procedures were determined to be ineffective would most likely increase the

Accepted Answer

A)  Extent of tests of controls. 
B)  Level of detection risk. 
C)  Extent of substantive procedures. 
D)  Level of inherent risk. 
A)  Extent of tests of controls. 
B)  Level of detection risk. 
C)  Extent of substantive procedures. 
D)  Level of inherent risk. C

Question 4

Assume that Dylan Lee found two deviations in a sample of 90 transactions.Using AICPA sample evaluation tables,the upper limit rate of deviation at a 5 percent risk of overreliance is

Accepted Answer

A)  2.0%. 
B)  2.2%. 
C)  5.9%. 
D)  6.9%. 
A)  2.0%. 
B)  2.2%. 
C)  5.9%. 
D)  6.9%.

Question 5

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

Accepted Answer

A)  Failure to perform the appropriate type of test of controls procedure. 
B)  Failure to notice a deviation from prescribed control procedures. 
C)  Incorrect estimation of the expected population deviation rate. 
D)  Incorrect accumulation of the number of deviations. 
A)  Failure to perform the appropriate type of test of controls procedure. 
B)  Failure to notice a deviation from prescribed control procedures. 
C)  Incorrect estimation of the expected population deviation rate. 
D)  Incorrect accumulation of the number of deviations.

Question 6

J.Pitino is auditing the revenue cycle of Texas Boots and has elected to perform a nonstatistical test of controls.Texas Boots sells Snakeskin Boots to wholesale distributors around the country.Pitino does not expect more than 1% deviations to be present in the system.A tolerable rate of deviation would be 5%.Pitino has assessed control risk as medium low and selected a sample size of 40 sales and has defined a deviation as a recorded sale not being supported by a shipping document.
Required:
A.How does nonstatistical sampling differ from statistical sampling?
B.Why would Pitino choose to perform nonstatistical sampling instead of statistical sampling?
C.How should Pitino select the sample?
D.What conclusion should Pitino draw if one deviation is found?

Accepted Answer

A.Nonstatistical sampling differs from s

Question 7

Which of the following factors is not assessed based on the acceptable level of control risk?

Accepted Answer

A)  Expected population deviation rate. 
B)  Risk of overreliance. 
C)  Tolerable rate of deviation. 
D)  All of the above are assessed based on the acceptable level of control risk. 
A)  Expected population deviation rate. 
B)  Risk of overreliance. 
C)  Tolerable rate of deviation. 
D)  All of the above are assessed based on the acceptable level of control risk.

Question 8

An audit team designed a sample that would provide a 10 percent risk of overreliance that not more than 7 percent of sales invoices lacked credit approval.From previous audits,the audit team expected that 3 percent of the sample invoices lacked proper approval.From the sample of 90 invoices,7 were found to lack credit approval.Using AICPA sample evaluation tables,the upper limit rate of deviation was

Accepted Answer

A)  3.3%. 
B)  4.5%. 
C)  7.8%. 
D)  12.8%. 
A)  3.3%. 
B)  4.5%. 
C)  7.8%. 
D)  12.8%.

Question 9

Which of the following major stages of the audit is most closely related to attributes sampling?

Accepted Answer

A)  Determining preliminary levels of materiality. 
B)  Performing tests of controls. 
C)  Performing substantive procedures. 
D)  Searching for the possible occurrence of subsequent events. 
A)  Determining preliminary levels of materiality. 
B)  Performing tests of controls. 
C)  Performing substantive procedures. 
D)  Searching for the possible occurrence of subsequent events.

Question 10

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

Accepted Answer

A)  This risk has an inverse relationship with sample size. 
B)  This risk may occur when the auditor's sample indicates that the control is functioning as expected. 
C)  This risk may occur when the true (but unknown) population deviation rate is higher than the tolerable rate of deviation. 
D)  All of the above are true with respect to the risk of overreliance. 
A)  This risk has an inverse relationship with sample size. 
B)  This risk may occur when the auditor's sample indicates that the control is functioning as expected. 
C)  This risk may occur when the true (but unknown) population deviation rate is higher than the tolerable rate of deviation. 
D)  All of the above are true with respect to the risk of overreliance.

Question 11

The auditor's sample size increases proportionally with increases in the population size.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following factors does not impact the sample size in an attributes sampling application?

Accepted Answer

A)  Expected population deviation rate. 
B)  Risk of overreliance. 
C)  Sample rate of deviation. 
D)  Tolerable rate of deviation. 
A)  Expected population deviation rate. 
B)  Risk of overreliance. 
C)  Sample rate of deviation. 
D)  Tolerable rate of deviation.

Question 13

The sample rate of deviation is determined by dividing the number of deviations noted by the auditor by the ________________________.

Accepted Answer

The answer of The sample rate of deviation is determined...

Question 14

Indicate whether each of the following characteristics relates to the risk of overreliance (O),risk of underreliance (U),both (B),or neither (N).
_____ 1.Is specifically considered by the auditor in determining sample size and evaluating sample results.
_____ 2.Is characterized by the auditor's sample indicating that the control is functioning effectively.
_____ 3.Results in the auditor drawing an incorrect conclusion with respect to the population being examined.
_____ 4.Is also referred to as the risk of assessing control risk too high.
_____ 5.Results in an effectiveness loss to the auditor.
_____ 6.Is used by the auditor in selecting sample items for examination and measuring sample items.
_____ 7.Is characterized by a population deviation rate of less than the tolerable rate of deviation.
_____ 8.Is an example of a sampling risk to which the auditor is exposed.

Accepted Answer

1.O; 2.O;

Question 15

An auditor who tested 50 transactions and found two deviations from an important control activity could conclude that

Accepted Answer

A)  The tolerable rate is 4%. 
B)  The critical rate of occurrence is 4%. 
C)  The sample rate of deviation is 4%. 
D)  The expected population deviation rate is 4%. 
A)  The tolerable rate is 4%. 
B)  The critical rate of occurrence is 4%. 
C)  The sample rate of deviation is 4%. 
D)  The expected population deviation rate is 4%.

Question 16

If the upper limit rate of deviation exceeds the tolerable rate of deviation,the auditor would ordinarily reduce the reliance on internal control and assess control risk at ___________________ levels.

Accepted Answer

The answer of If the upper limit rate of deviation...

Question 17

The upper limit rate of deviation has a(n)___________________________________________ probability of equaling or exceeding the true population deviation rate.

Accepted Answer

1 minus th

Question 18

The following are steps in attributes sampling: 1 = Define the population
2 = Determine the objective of sampling
3 = Determine the sample size
4 = Select the sample
What is the general order in which the steps are performed?

Accepted Answer

A)  1, 2, 3, 4. 
B)  2, 1, 3, 4. 
C)  1, 2, 4, 3. 
D)  2, 1, 4, 3. 
A)  1, 2, 3, 4. 
B)  2, 1, 3, 4. 
C)  1, 2, 4, 3. 
D)  2, 1, 4, 3.

Question 19

Mary Todd is auditing White House furniture.In selecting a sample of purchases,she finds that a purchase order is missing.She should

Accepted Answer

A)  Select another purchase to test. 
B)  Have the client recreate the purchase order. 
C)  Consider the sample item a deviation. 
D)  Ask the client whether the purchase was authorized. 
A)  Select another purchase to test. 
B)  Have the client recreate the purchase order. 
C)  Consider the sample item a deviation. 
D)  Ask the client whether the purchase was authorized.

Question 20

If the ______________________ exceeds the ______________________,the audit team would decide to rely on internal control as planned and maintain control risk at planned levels.

Accepted Answer

A)  upper limit rate of deviation; tolerable rate of deviation. 
B)  tolerable rate of deviation; upper limit rate of deviation. 
C)  expected population deviation rate; tolerable rate of deviation. 
D)  tolerable rate of deviation; expected population deviation rate. 
A)  upper limit rate of deviation; tolerable rate of deviation. 
B)  tolerable rate of deviation; upper limit rate of deviation. 
C)  expected population deviation rate; tolerable rate of deviation. 
D)  tolerable rate of deviation; expected population deviation rate.

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

Lower levels of control risk are associated with ______________________ sample sizes for substantive procedures.

An auditor who increases the assessed level of control risk because certain control procedures were determined to be ineffective would most likely increase the

Assume that Dylan Lee found two deviations in a sample of 90 transactions.Using AICPA sample evaluation tables,the upper limit rate of deviation at a 5 percent risk of overreliance is

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

Which of the following factors is not assessed based on the acceptable level of control risk?

Which of the following major stages of the audit is most closely related to attributes sampling?

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

The auditor's sample size increases proportionally with increases in the population size.

Which of the following factors does not impact the sample size in an attributes sampling application?

The sample rate of deviation is determined by dividing the number of deviations noted by the auditor by the ________________________.

An auditor who tested 50 transactions and found two deviations from an important control activity could conclude that

If the upper limit rate of deviation exceeds the tolerable rate of deviation,the auditor would ordinarily reduce the reliance on internal control and assess control risk at ___________________ levels.

The upper limit rate of deviation has a(n)___________________________________________ probability of equaling or exceeding the true population deviation rate.

The following are steps in attributes sampling: 1 = Define the population 2 = Determine the objective of sampling 3 = Determine the sample size 4 = Select the sample What is the general order in which the steps are performed?

Mary Todd is auditing White House furniture.In selecting a sample of purchases,she finds that a purchase order is missing.She should

If the exceeds the ,the audit team would decide to rely on internal control as planned and maintain control risk at planned levels.

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 Governmental and Fraud Audits

Overview of Sampling

Variables Sampling

Auditing in a Computerized Environment

Filters

Exam 18: Attributes Sampling

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

Lower levels of control risk are associated with ______________________ sample sizes for substantive procedures.

An auditor who increases the assessed level of control risk because certain control procedures were determined to be ineffective would most likely increase the

Assume that Dylan Lee found two deviations in a sample of 90 transactions.Using AICPA sample evaluation tables,the upper limit rate of deviation at a 5 percent risk of overreliance is

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

Which of the following factors is not assessed based on the acceptable level of control risk?

Which of the following major stages of the audit is most closely related to attributes sampling?

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

The auditor's sample size increases proportionally with increases in the population size.

Which of the following factors does not impact the sample size in an attributes sampling application?

The sample rate of deviation is determined by dividing the number of deviations noted by the auditor by the ________________________.

An auditor who tested 50 transactions and found two deviations from an important control activity could conclude that

If the upper limit rate of deviation exceeds the tolerable rate of deviation,the auditor would ordinarily reduce the reliance on internal control and assess control risk at ___________________ levels.

The upper limit rate of deviation has a(n)___________________________________________ probability of equaling or exceeding the true population deviation rate.

The following are steps in attributes sampling: 1 = Define the population 2 = Determine the objective of sampling 3 = Determine the sample size 4 = Select the sample What is the general order in which the steps are performed?

Mary Todd is auditing White House furniture.In selecting a sample of purchases,she finds that a purchase order is missing.She should

If the ______________________ exceeds the ______________________,the audit team would decide to rely on internal control as planned and maintain control risk at planned levels.

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 Governmental and Fraud Audits

Overview of Sampling

Variables Sampling

Auditing in a Computerized Environment

Filters

If the exceeds the ,the audit team would decide to rely on internal control as planned and maintain control risk at planned levels.