Exam 18: Attributes Sampling

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

The primary benefit of using nonstatistical sampling is that

If the tolerable rate of deviation is 6 percent,the acceptable risk of overreliance is 5 percent,and the upper limit rate of deviation is 4.8 percent,which of the following statements is not true?

When performing attributes sampling,the objective of the sampling plan is to identify important _____________________ corresponding to the financial statement assertions of interest.

Which of the following would not be a situation in which the auditor would apply attributes sampling?

Baily Cox,an audit manager,judged that the test of controls of the company's 50,000 purchase transactions should be based on a tolerable rate of deviation of 6 percent,a risk of overreliance of 5 percent,and an expected population deviation rate of 3 percent.Using AICPA sample size tables,the appropriate sample size in this situation would be

The following are some of specific activities performed in an attributes sampling application.Indicate,using the correct letter,which major step in an attributes sampling application is most closely associated with the specific activity.Each step is associated with only one activity.

An important control for sales on account is that the client mathematically verifies all sales invoices.Which of the following would be the most appropriate population from which to select sample items?

If an audit team examined 100 transactions and found one deviation from an important control procedure,the audit conclusion could be that control risk can be assessed at the associated control risk level when

Which of the following sampling risks does the audit team control in an attributes sampling application (ROO = risk of overreliance,ROU = risk of underreliance)?

If the upper limit rate of deviation is less than or equal to the ________________________________,the auditor may decide to rely on internal control as planned and maintain control risk at planned levels.

Rome,CPA,is examining the internal control of Smack,Inc.Rome has established a risk of overreliance of 10%,an expected population deviation rate of 1%,and a tolerable rate of deviation of 5%. What is the appropriate sample size that would be examined by Rome?

The expected population deviation rate has an inverse relationship with the sample size.

After defining the deviations,the auditor would next identify the key controls to examine.

An auditor wanted to test credit approval on 10,000 sales invoices processed during the year.The auditor designed a statistical sample that would provide a 1% risk of overreliance (99% confidence)that not more than 7% of the sales invoices lacked approval.The auditor estimated from previous experience that about 2½% of the sales invoices lacked approval.A sample of 200 invoices was examined,and 7 of them were lacking approval.The auditor then determined the upper limit rate of deviation to be 8%. The allowance for sampling risk was

Based on relationships among these factors,fill in the missing data for each of the following independent attributes sampling applications.

To measure sample items in an attributes sampling application,the auditor performs the appropriate test of controls.

The purpose of tests of controls is to determine that:

The auditor determines the expected population deviation rate based on either prior audit experience or a pilot sample from the current year.

Which of the following is not true about using nonstatistical sampling?