Question 1

The upper limit rate of deviation in attributes sampling is

Accepted Answer

A)  The actual deviation rate in the population. 
B)  Always less than the tolerable rate of deviation. 
C)  Always more than the tolerable rate of deviation. 
D)  A statistical calculation that considers sampling risk. 
A)  The actual deviation rate in the population. 
B)  Always less than the tolerable rate of deviation. 
C)  Always more than the tolerable rate of deviation. 
D)  A statistical calculation that considers sampling risk.

Question 2

Which of the following factors has a direct relationship with sample size in an attributes sampling application?

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

An erroneous decision to assess control risk too high can have an adverse effect on

Accepted Answer

A)  The efficiency of an audit engagement. 
B)  The effectiveness of an audit engagement. 
C)  The validity of an audit. 
D)  The type of report the auditor decides to render. 
A)  The efficiency of an audit engagement. 
B)  The effectiveness of an audit engagement. 
C)  The validity of an audit. 
D)  The type of report the auditor decides to render.

Question 4

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 1,000th invoice.This selection process is referred to as

Accepted Answer

A)  Unrestricted random selection. 
B)  Nonstatistical selection. 
C)  Systematic random selection. 
D)  Judgmental selection. 
A)  Unrestricted random selection. 
B)  Nonstatistical selection. 
C)  Systematic random selection. 
D)  Judgmental selection.

Question 5

The _____________________________ is a conservative "adjustment" of the sample rate of deviation that controls the auditor's exposure to the risk of overreliance.

Accepted Answer

allowance

Question 6

The risk of underreliance occurs when the auditor's estimate of the deviation rate exceeds the tolerable rate of deviation.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following does not have a direct relationship with sample size?

Accepted Answer

A)  Expected population deviation rate. 
B)  Population size. 
C)  Risk of overreliance. 
D)  All of the above have a direct relationship with sample size. 
A)  Expected population deviation rate. 
B)  Population size. 
C)  Risk of overreliance. 
D)  All of the above have a direct relationship with sample size.

Question 8

Which of the following best describes the method of determining the upper limit rate of deviation?

Accepted Answer

A)  Expected population deviation rate + Allowance for sampling risk. 
B)  Risk of underreliance + Allowance for sampling risk. 
C)  Sample rate of deviation + Allowance for sampling risk. 
D)  Tolerable rate of deviation + Allowance for sampling risk. 
A)  Expected population deviation rate + Allowance for sampling risk. 
B)  Risk of underreliance + Allowance for sampling risk. 
C)  Sample rate of deviation + Allowance for sampling risk. 
D)  Tolerable rate of deviation + Allowance for sampling risk.

Question 9

Which of the following statements is correct concerning statistical sampling in tests of controls?

Accepted Answer

A)  Deviations from control procedures at a given rate usually result in misstatements at a higher rate. 
B)  As the population size doubles, the sample size should also double. 
C)  The auditor does not consider qualitative aspects of deviations. 
D)  There is an inverse relationship between the sample size and the tolerable rate of deviation. 
A)  Deviations from control procedures at a given rate usually result in misstatements at a higher rate. 
B)  As the population size doubles, the sample size should also double. 
C)  The auditor does not consider qualitative aspects of deviations. 
D)  There is an inverse relationship between the sample size and the tolerable rate of deviation.

Question 10

The sample rate of deviation is determined by dividing the number of deviations by the size of the population.

Accepted Answer

A) True 
 B)False

Question 11

The expected population deviation rate has a(n)___________________ relationship with the necessary sample size.

Accepted Answer

The answer of The expected population deviation rate has a(n)___________________...

Question 12

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

Accepted Answer

A)  Less than the risk of overreliance based on the auditor's sample. 
B)  Less than the deviation rate in the auditor's sample. 
C)  More than the risk of overreliance based on the auditor's sample. 
D)  More than the deviation rate in the auditor's sample. 
A)  Less than the risk of overreliance based on the auditor's sample. 
B)  Less than the deviation rate in the auditor's sample. 
C)  More than the risk of overreliance based on the auditor's sample. 
D)  More than the deviation rate in the auditor's sample.

Question 13

The difference between the sample rate of deviation and the upper limit rate of deviation is the ________________________________________.

Accepted Answer

allowance

Question 14

What is an auditor's evaluation of a statistical sample for attributes when a test of 100 documents results in four deviations if the tolerable rate of deviation is 5%,the expected population deviation rate is 3%,and the allowance for sampling risk is 2%?

Accepted Answer

A)  Accept the sample results as support for planned reliance on the control because the tolerable rate of deviation less then allowance for sampling risk equals the expected population deviation rate. 
B)  Modify planned reliance on the control because the sample rate of deviation plus the allowance for sampling risk exceeds the tolerable rate of deviation. 
C)  Modify planned reliance on the control because the tolerable rate of deviation plus the allowance for sampling risk exceeds the expected population deviation rate. 
D)  Accept the sample results as support for planned reliance on the control because the sample rate of deviation plus the allowance for sampling risk exceeds the tolerable rate of deviation. 
A)  Accept the sample results as support for planned reliance on the control because the tolerable rate of deviation less then allowance for sampling risk equals the expected population deviation rate. 
B)  Modify planned reliance on the control because the sample rate of deviation plus the allowance for sampling risk exceeds the tolerable rate of deviation. 
C)  Modify planned reliance on the control because the tolerable rate of deviation plus the allowance for sampling risk exceeds the expected population deviation rate. 
D)  Accept the sample results as support for planned reliance on the control because the sample rate of deviation plus the allowance for sampling risk exceeds the tolerable rate of deviation.

Question 15

Which of the following steps in the attributes sampling process would ordinarily be performed last?

Accepted Answer

A)  Defining the deviation condition. 
B)  Defining the population of interest. 
C)  Selecting sample items. 
D)  Evaluating sample results. 
A)  Defining the deviation condition. 
B)  Defining the population of interest. 
C)  Selecting sample items. 
D)  Evaluating sample results.

Question 16

The __________________________________ is the maximum rate of deviations permitted by the auditor without reducing the reliance on internal control.

Accepted Answer

tolerable

Question 17

If an audit team calculated an upper limit rate of deviation of 5 percent when the tolerable rate of deviation was 4 percent,both at the same risk of overreliance,control risk should be

Accepted Answer

A)  Assessed at the level associated with the 4 percent tolerable rate of deviation. 
B)  Increased and substantive procedures should be adjusted accordingly. 
C)  Assessed at the maximum level (100 percent) because the company's performance failed the test. 
D)  Decreased and substantive procedures should be adjusted accordingly. 
A)  Assessed at the level associated with the 4 percent tolerable rate of deviation. 
B)  Increased and substantive procedures should be adjusted accordingly. 
C)  Assessed at the maximum level (100 percent) because the company's performance failed the test. 
D)  Decreased and substantive procedures should be adjusted accordingly.

Question 18

In performing tests of controls over authorization of cash disbursements,which of the following statistical sampling methods would be most appropriate?

Accepted Answer

A)  Variables. 
B)  Stratified. 
C)  Ratio. 
D)  Attributes. 
A)  Variables. 
B)  Stratified. 
C)  Ratio. 
D)  Attributes.

Question 19

An auditor interested in ensuring that all sales have been recorded would define the population as:

Accepted Answer

A)  Entries in the cash receipts journal. 
B)  Entries in the general journal. 
C)  Remittance advices. 
D)  Shipping documents. 
A)  Entries in the cash receipts journal. 
B)  Entries in the general journal. 
C)  Remittance advices. 
D)  Shipping documents.

Question 20

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

Accepted Answer

1.3; 2.12.5%; 3.7.5%

The upper limit rate of deviation in attributes sampling is

Which of the following factors has a direct relationship with sample size in an attributes sampling application?

An erroneous decision to assess control risk too high can have an adverse effect on

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

The _____________________________ is a conservative "adjustment" of the sample rate of deviation that controls the auditor's exposure to the risk of overreliance.

The risk of underreliance occurs when the auditor's estimate of the deviation rate exceeds the tolerable rate of deviation.

Which of the following does not have a direct relationship with sample size?

Which of the following best describes the method of determining the upper limit rate of deviation?

Which of the following statements is correct concerning statistical sampling in tests of controls?

The sample rate of deviation is determined by dividing the number of deviations by the size of the population.

The expected population deviation rate has a(n)___________________ relationship with the necessary sample size.

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

The difference between the sample rate of deviation and the upper limit rate of deviation is the ________________________________________.

What is an auditor's evaluation of a statistical sample for attributes when a test of 100 documents results in four deviations if the tolerable rate of deviation is 5%,the expected population deviation rate is 3%,and the allowance for sampling risk is 2%?

Which of the following steps in the attributes sampling process would ordinarily be performed last?

The __________________________________ is the maximum rate of deviations permitted by the auditor without reducing the reliance on internal control.

If an audit team calculated an upper limit rate of deviation of 5 percent when the tolerable rate of deviation was 4 percent,both at the same risk of overreliance,control risk should be

In performing tests of controls over authorization of cash disbursements,which of the following statistical sampling methods would be most appropriate?

An auditor interested in ensuring that all sales have been recorded would define the population as:

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

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

The upper limit rate of deviation in attributes sampling is

Which of the following factors has a direct relationship with sample size in an attributes sampling application?

An erroneous decision to assess control risk too high can have an adverse effect on

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 1,000th invoice.This selection process is referred to as

The _____________________________ is a conservative "adjustment" of the sample rate of deviation that controls the auditor's exposure to the risk of overreliance.

The risk of underreliance occurs when the auditor's estimate of the deviation rate exceeds the tolerable rate of deviation.

Which of the following does not have a direct relationship with sample size?

Which of the following best describes the method of determining the upper limit rate of deviation?

Which of the following statements is correct concerning statistical sampling in tests of controls?

The sample rate of deviation is determined by dividing the number of deviations by the size of the population.

The expected population deviation rate has a(n)___________________ relationship with the necessary sample size.

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

The difference between the sample rate of deviation and the upper limit rate of deviation is the ________________________________________.

What is an auditor's evaluation of a statistical sample for attributes when a test of 100 documents results in four deviations if the tolerable rate of deviation is 5%,the expected population deviation rate is 3%,and the allowance for sampling risk is 2%?

Which of the following steps in the attributes sampling process would ordinarily be performed last?

The __________________________________ is the maximum rate of deviations permitted by the auditor without reducing the reliance on internal control.

If an audit team calculated an upper limit rate of deviation of 5 percent when the tolerable rate of deviation was 4 percent,both at the same risk of overreliance,control risk should be

In performing tests of controls over authorization of cash disbursements,which of the following statistical sampling methods would be most appropriate?

An auditor interested in ensuring that all sales have been recorded would define the population as:

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

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

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