Question 1

Auditors consider statistical sampling to be characterized by the following:

Accepted Answer

A)  Representative sample selection and nonmathematical consideration of the results. 
B)  Carefully biased sample selection and mathematical calculation of the results. 
C)  Representative sample selection and mathematical calculation of the results. 
D)  Carefully biased sample selection and nonmathematical consideration of the results. 
A)  Representative sample selection and nonmathematical consideration of the results. 
B)  Carefully biased sample selection and mathematical calculation of the results. 
C)  Representative sample selection and mathematical calculation of the results. 
D)  Carefully biased sample selection and nonmathematical consideration of the results.

Question 2

The risk of _______________________________ occurs when the auditor concludes that the account balance is misstated when,in fact,it is fairly stated.

Accepted Answer

The answer of The risk of _______________________________ occurs when the...

Question 3

The auditor typically cannot control nonsampling risk during an examination by selecting a larger number of items.

Accepted Answer

A) True 
 B)False

Question 4

In which of the following situations would the use of sampling be most appropriate?

Accepted Answer

A)  The need for precise information is less important. 
B)  The number of items comprising the population is smaller. 
C)  The likelihood of selecting a representative sample is relatively low. 
D)  The use of sampling would be appropriate in all of the above situations. 
A)  The need for precise information is less important. 
B)  The number of items comprising the population is smaller. 
C)  The likelihood of selecting a representative sample is relatively low. 
D)  The use of sampling would be appropriate in all of the above situations.

Question 5

Which of the following is not a method used by auditors to control their exposure to sampling risk during the examination?

Accepted Answer

A)  Determining an appropriate sample size. 
B)  Performing the appropriate audit procedure. 
C)  Ensuring that all items have an equal opportunity to be selected. 
D)  Evaluating sample results using a mathematical basis. 
A)  Determining an appropriate sample size. 
B)  Performing the appropriate audit procedure. 
C)  Ensuring that all items have an equal opportunity to be selected. 
D)  Evaluating sample results using a mathematical basis.

Question 6

The method of sample selection in which a random starting point is selected and a fixed number of items are bypassed prior to the next item being selected is referred to as

Accepted Answer

A)  Block selection. 
B)  Haphazard selection. 
C)  Systematic random selection. 
D)  Unrestricted random selection. 
A)  Block selection. 
B)  Haphazard selection. 
C)  Systematic random selection. 
D)  Unrestricted random selection.

Question 7

The following are statements or examples related to audit sampling applications.Indicate,using the correct letter,which concept is most closely associated with the statement or example.Each concept may be related to more than one statement or example.
A.Statistical sampling
B.Nonstatistical sampling
C.Sampling risk
D.Nonsampling risk
____ 1.C.Jones,CPA,selected a sample and evaluated the results of her sample using the laws of probability.
____ 2.G.Wilson,CPA,checked to see if any signature was in the credit approval box on a sample of sales orders rather than looking for only authorized signatures.
____ 3.Based on a statistical sample,M.Jackson,CPA,concluded that the client's control was functioning effectively when the deviation rate in the population was actually unacceptable.
____ 4.I.Barnum,CPA,selected all invoices over $1,000 and all invoices recorded on the 15th of each month for his sample.
____ 5.When a client could not produce an invoice for a sample selected by the auditor,the auditor accepted the client's assurance that the invoice contained the appropriate approval.

Accepted Answer

The answer of The following are statements or examples related...

Question 8

An advantage of statistical sampling over nonstatistical sampling methods is that statistical methods

Accepted Answer

A)  Afford more assurance than a nonstatistical sample of equal size. 
B)  Provide an objective basis for quantitatively evaluating sampling risk. 
C)  Can more easily convert the sample into a dual-purpose test useful for substantive procedures. 
D)  Eliminate the need to use judgment in determining appropriate sample sizes. 
A)  Afford more assurance than a nonstatistical sample of equal size. 
B)  Provide an objective basis for quantitatively evaluating sampling risk. 
C)  Can more easily convert the sample into a dual-purpose test useful for substantive procedures. 
D)  Eliminate the need to use judgment in determining appropriate sample sizes.

Question 9

If systematic selection is used with a starting point of 10,a population size of 100,and a necessary sample size of 20,the first three items selected for examination would be

Accepted Answer

A)  10, 110, 210. 
B)  110, 210, 310. 
C)  10, 15, 20. 
D)  15, 20, 25. 
A)  10, 110, 210. 
B)  110, 210, 310. 
C)  10, 15, 20. 
D)  15, 20, 25.

Question 10

Which of the following risks exposes the auditor to effectiveness losses?

Accepted Answer

A)  Risk of assessing control risk too high, risk of incorrect acceptance. 
B)  Risk of assessing control risk too low, risk of incorrect rejection. 
C)  Risk of assessing control risk too high, risk of incorrect rejection. 
D)  Risk of assessing control risk too low, risk of incorrect acceptance. 
A)  Risk of assessing control risk too high, risk of incorrect acceptance. 
B)  Risk of assessing control risk too low, risk of incorrect rejection. 
C)  Risk of assessing control risk too high, risk of incorrect rejection. 
D)  Risk of assessing control risk too low, risk of incorrect acceptance.

Question 11

A sample selection method in which items are selected in a nonsystematic manner is referred to as

Accepted Answer

A)  Block selection. 
B)  Haphazard selection. 
C)  Systematic random selection. 
D)  Unrestricted random selection. 
A)  Block selection. 
B)  Haphazard selection. 
C)  Systematic random selection. 
D)  Unrestricted random selection.

Question 12

The objective of ________________________ is to make a statement about a population of interest by examining only a subset of that population.

Accepted Answer

The answer of The objective of ________________________ is to make...

Question 13

_______________________________ is used to determine the extent to which a particular characteristic exists within a population.

Accepted Answer

The answer of _______________________________ is used to determine the extent...

Question 14

Statistical sampling plans ensure that samples are selected randomly from the population.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is an advantage of nonstatistical sampling?

Accepted Answer

A)  It measures the audit team's exposure to sampling risk. 
B)  It is required by generally accepted auditing standards. 
C)  It ensures that samples are randomly selected. 
D)  It is typically less complex than statistical sampling. 
A)  It measures the audit team's exposure to sampling risk. 
B)  It is required by generally accepted auditing standards. 
C)  It ensures that samples are randomly selected. 
D)  It is typically less complex than statistical sampling.

Question 16

While performing an audit of accounts receivable,R.Allen,CPA,found that the sample results supported the conclusion that the accounts receivable balance was materially misstated.However,the balance was,in fact,not materially misstated.This situation illustrates the risk of

Accepted Answer

A)  Incorrect rejection. 
B)  Incorrect acceptance. 
C)  Assessing control risk too low. 
D)  Assessing control risk too high. 
A)  Incorrect rejection. 
B)  Incorrect acceptance. 
C)  Assessing control risk too low. 
D)  Assessing control risk too high.

Question 17

The risk of incorrect rejection and the risk of underreliance relate to the

Accepted Answer

A)  Effectiveness of the audit. 
B)  Efficiency of the audit. 
C)  Preliminary estimates of performance materiality. 
D)  Tolerable misstatement. 
A)  Effectiveness of the audit. 
B)  Efficiency of the audit. 
C)  Preliminary estimates of performance materiality. 
D)  Tolerable misstatement.

Question 18

Mistakes made in evaluating sample items that were appropriately selected from the population are examples of:

Accepted Answer

A)  Evidence risk. 
B)  Evaluation risk. 
C)  Nonsampling risk. 
D)  Sampling risk. 
A)  Evidence risk. 
B)  Evaluation risk. 
C)  Nonsampling risk. 
D)  Sampling risk.

Question 19

Which of the following is appropriately used for statistical sampling applications?

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 20

In an audit sampling application,an auditor

Accepted Answer

A)  Performs procedures on all items in a balance and makes a conclusion about the entire balance 
B)  Performs procedures on less than 100 percent of the items in a balance and formulates a conclusion about the entire balance 
C)  Performs procedures on less than 100 percent of the items in a class of transactions to become familiar with the client's accounting system. 
D)  Performs analytical procedures on the client's unaudited financial statements when planning the audit. 
A)  Performs procedures on all items in a balance and makes a conclusion about the entire balance 
B)  Performs procedures on less than 100 percent of the items in a balance and formulates a conclusion about the entire balance 
C)  Performs procedures on less than 100 percent of the items in a class of transactions to become familiar with the client's accounting system. 
D)  Performs analytical procedures on the client's unaudited financial statements when planning the audit.

Auditors consider statistical sampling to be characterized by the following:

The risk of _______________________________ occurs when the auditor concludes that the account balance is misstated when,in fact,it is fairly stated.

The auditor typically cannot control nonsampling risk during an examination by selecting a larger number of items.

In which of the following situations would the use of sampling be most appropriate?

Which of the following is not a method used by auditors to control their exposure to sampling risk during the examination?

The method of sample selection in which a random starting point is selected and a fixed number of items are bypassed prior to the next item being selected is referred to as

An advantage of statistical sampling over nonstatistical sampling methods is that statistical methods

If systematic selection is used with a starting point of 10,a population size of 100,and a necessary sample size of 20,the first three items selected for examination would be

Which of the following risks exposes the auditor to effectiveness losses?

A sample selection method in which items are selected in a nonsystematic manner is referred to as

The objective of ________________________ is to make a statement about a population of interest by examining only a subset of that population.

_______________________________ is used to determine the extent to which a particular characteristic exists within a population.

Statistical sampling plans ensure that samples are selected randomly from the population.

Which of the following is an advantage of nonstatistical sampling?

While performing an audit of accounts receivable,R.Allen,CPA,found that the sample results supported the conclusion that the accounts receivable balance was materially misstated.However,the balance was,in fact,not materially misstated.This situation illustrates the risk of

The risk of incorrect rejection and the risk of underreliance relate to the

Mistakes made in evaluating sample items that were appropriately selected from the population are examples of:

Which of the following is appropriately used for statistical sampling applications?

In an audit sampling application,an auditor

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

Attributes Sampling

Variables Sampling

Auditing in a Computerized Environment

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Exam 17: Overview of Sampling

Auditors consider statistical sampling to be characterized by the following:

The risk of _______________________________ occurs when the auditor concludes that the account balance is misstated when,in fact,it is fairly stated.

The auditor typically cannot control nonsampling risk during an examination by selecting a larger number of items.

In which of the following situations would the use of sampling be most appropriate?

Which of the following is not a method used by auditors to control their exposure to sampling risk during the examination?

The method of sample selection in which a random starting point is selected and a fixed number of items are bypassed prior to the next item being selected is referred to as

An advantage of statistical sampling over nonstatistical sampling methods is that statistical methods

If systematic selection is used with a starting point of 10,a population size of 100,and a necessary sample size of 20,the first three items selected for examination would be

Which of the following risks exposes the auditor to effectiveness losses?

A sample selection method in which items are selected in a nonsystematic manner is referred to as

The objective of ________________________ is to make a statement about a population of interest by examining only a subset of that population.

_______________________________ is used to determine the extent to which a particular characteristic exists within a population.

Statistical sampling plans ensure that samples are selected randomly from the population.

Which of the following is an advantage of nonstatistical sampling?

While performing an audit of accounts receivable,R.Allen,CPA,found that the sample results supported the conclusion that the accounts receivable balance was materially misstated.However,the balance was,in fact,not materially misstated.This situation illustrates the risk of

The risk of incorrect rejection and the risk of underreliance relate to the

Mistakes made in evaluating sample items that were appropriately selected from the population are examples of:

Which of the following is appropriately used for statistical sampling applications?

In an audit sampling application,an auditor

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

Attributes Sampling

Variables Sampling

Auditing in a Computerized Environment

Filters