Question 1

Which of the following doesnot have a direct relationship with sample size?

Accepted Answer

A)  Expected population deviation rate. 
B)  Population size. 
C)  Risk of assessing control risk too low. 
D)  All of the above have a direct relationship with sample size. 
A)  Expected population deviation rate. 
B)  Population size. 
C)  Risk of assessing control risk too low. 
D)  All of the above have a direct relationship with sample size.

Question 2

Which of the following allows the auditor to limit the exposure to sampling risk?

Accepted Answer

A)  Determining an appropriate sample size, yes; performing an appropriate audit procedure, yes. 
B)  Determining an appropriate sample size, yes; performing an appropriate audit procedure, no. 
C)  Determining an appropriate sample size, no; performing an appropriate audit procedure, yes. 
D)  Determining an appropriate sample size, no; performing an appropriate audit procedure, no. 
A)  Determining an appropriate sample size, yes; performing an appropriate audit procedure, yes. 
B)  Determining an appropriate sample size, yes; performing an appropriate audit procedure, no. 
C)  Determining an appropriate sample size, no; performing an appropriate audit procedure, yes. 
D)  Determining an appropriate sample size, no; performing an appropriate audit procedure, no.

Question 3

The probability that an auditor's conclusion based on a sample might be different from the conclusion based on the entire population identifies the concept of:

Accepted Answer

A)  Confidence levels. 
B)  Nonsampling risk. 
C)  Nonstatistical sampling. 
D)  Sampling risk. 
A)  Confidence levels. 
B)  Nonsampling risk. 
C)  Nonstatistical sampling. 
D)  Sampling risk.

Question 4

Sampling risk has a direct relationship with sample size.

Accepted Answer

A) True 
 B)False

Question 5

Sampling is ordinarily used when the number of items composing the population is relatively small.

Accepted Answer

A) True 
 B)False

Question 6

Place the following steps in the sampling process in the order in which they are performed. 1 = Measure sample items
2 = Select sample items
3 = Define the population

Accepted Answer

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

Question 7

You are considering the use of sampling to determine the average age of persons attending a movie at different times during the day.Assume that you have controlled sampling risk to 10 percent and estimate that the average age is 43 years with an associated precision of 10 years.
A. Form a precision interval based on your sampling application. What general conclusions can you draw from this precision interval?
A. Precision interval = 43 years + or - 10 years
Precision interval = 33 years to 53 years
B. Based on the precision interval from (a), how confident do you feel that the average age of the moviegoers is more than 35? Less than 60?
B. Because the lower bound of the precision interval (33 years) is less than 35 years, you could not reliably conclude that the average age of the moviegoers is more than 35 years. Because the upper bound of the precision interval (53 years) is less than 60 years, you could reliably conclude that the average age of the moviegoers is less than 60 years.

Accepted Answer

A.Precision interval = 43 years + or - 1

Question 8

The risk that the decision made based on the sample will differ from the decision made based on the entire population is referred to as

Accepted Answer

A)  Audit risk. 
B)  Examination risk. 
C)  Sampling risk. 
D)  Nonsampling risk. 
A)  Audit risk. 
B)  Examination risk. 
C)  Sampling risk. 
D)  Nonsampling risk.

Question 9

The audit team will choose to reduce the reliance on controls if the ___________________ is greater than the ___________________________.

Accepted Answer

A)  Tolerable rate of deviation; upper limit rate of deviation. 
B)  Upper limit rate of deviation; tolerable rate of deviation. 
C)  Expected rate of deviation; tolerable rate of deviation. 
D)  Tolerable rate of deviation; expected rate of deviation. 
A)  Tolerable rate of deviation; upper limit rate of deviation. 
B)  Upper limit rate of deviation; tolerable rate of deviation. 
C)  Expected rate of deviation; tolerable rate of deviation. 
D)  Tolerable rate of deviation; expected rate of deviation.

Question 10

Which of the following characteristics of substantive procedures is most closely associated with the use of sampling?

Accepted Answer

A)  Extent of substantive procedures. 
B)  Nature of substantive procedures. 
C)  Timing of substantive procedures. 
D)  All of the above are closely associated with the use of sampling. 
A)  Extent of substantive procedures. 
B)  Nature of substantive procedures. 
C)  Timing of substantive procedures. 
D)  All of the above are closely associated with the use of sampling.

Question 11

One of the advantages of sampling is that it is typically more effective than examining the entire population.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following most closely represents an unrestricted random selection procedure?

Accepted Answer

A)  Identifying a starting point within the population and bypassing a fixed number of items. 
B)  Matching items in the population to a series of randomly selected numbers. 
C)  Randomly selecting invoices to customers whose last names start with W. 
D)  Randomly picking items from an accounts receivable file. 
A)  Identifying a starting point within the population and bypassing a fixed number of items. 
B)  Matching items in the population to a series of randomly selected numbers. 
C)  Randomly selecting invoices to customers whose last names start with W. 
D)  Randomly picking items from an accounts receivable file.

Question 13

In which of the following circumstances should sampling be used?

Accepted Answer

A)  The individual is not concerned with an extremely precise estimate of the attribute being examined. 
B)  It is very difficult to define and identify the entire population. 
C)  The population comprises a small number of items. 
D)  An individual is interested in examining all occurrences of a single type in the population. 
A)  The individual is not concerned with an extremely precise estimate of the attribute being examined. 
B)  It is very difficult to define and identify the entire population. 
C)  The population comprises a small number of items. 
D)  An individual is interested in examining all occurrences of a single type in the population.

Question 14

Reaching an incorrect conclusion because of reasons other than the nature of the sample is referred to as ______________________________ risk.

Accepted Answer

The answer of Reaching an incorrect conclusion because of reasons...

Question 15

The following is a list of major steps in the sampling process.Indicate,using the correct letter,the phase in which each step belongs.Each phase may be associated with more than one step.
A. Planning
B. Performing
C. Evaluating

Accepted Answer

1.B,2.A,3.

Question 16

_________________________ selection methods pick sample items in a nonsystematic manner.

Accepted Answer

The answer of _________________________ selection methods pick sample items in...

Question 17

What is the primary drawback with respect to the use of sampling?

Accepted Answer

A)  Individuals may fail to obtain a true understanding of the question they are examining. 
B)  The time spent in planning and selecting the sample may exceed the time saved from examining only a subset of the items. 
C)  The conclusion reached by examining a sample of items may differ from the conclusion that would be reached if the entire population were examined. 
D)  Sampling cannot be used to examine account balances that are material to the financial statements. 
A)  Individuals may fail to obtain a true understanding of the question they are examining. 
B)  The time spent in planning and selecting the sample may exceed the time saved from examining only a subset of the items. 
C)  The conclusion reached by examining a sample of items may differ from the conclusion that would be reached if the entire population were examined. 
D)  Sampling cannot be used to examine account balances that are material to the financial statements.

Question 18

In variables sampling,the risk of incorrect acceptance relates to the effectiveness of the audit examination.

Accepted Answer

A) True 
 B)False

Question 19

Why is defining the population so important in a sampling application?

Accepted Answer

A)  To permit the auditor to select the appropriate type of substantive procedure. 
B)  To ensure that the results appropriately represent the entire population. 
C)  To reduce sampling risk to the appropriate level. 
D)  To allow the auditor to appropriately measure sample items. 
A)  To permit the auditor to select the appropriate type of substantive procedure. 
B)  To ensure that the results appropriately represent the entire population. 
C)  To reduce sampling risk to the appropriate level. 
D)  To allow the auditor to appropriately measure sample items.

Question 20

Which of the following steps would normally be performed last in a sampling application?

Accepted Answer

A)  Examine sample items and determine the sample estimate. 
B)  Determine the level of reliability for the sampling application. 
C)  Identify the objective of the sampling application. 
D)  Determine the appropriate sample size. 
A)  Examine sample items and determine the sample estimate. 
B)  Determine the level of reliability for the sampling application. 
C)  Identify the objective of the sampling application. 
D)  Determine the appropriate sample size.

Which of the following doesnot have a direct relationship with sample size?

Which of the following allows the auditor to limit the exposure to sampling risk?

The probability that an auditor's conclusion based on a sample might be different from the conclusion based on the entire population identifies the concept of:

Sampling risk has a direct relationship with sample size.

Sampling is ordinarily used when the number of items composing the population is relatively small.

Place the following steps in the sampling process in the order in which they are performed. 1 = Measure sample items 2 = Select sample items 3 = Define the population

The risk that the decision made based on the sample will differ from the decision made based on the entire population is referred to as

The audit team will choose to reduce the reliance on controls if the _ is greater than the _________.

Which of the following characteristics of substantive procedures is most closely associated with the use of sampling?

One of the advantages of sampling is that it is typically more effective than examining the entire population.

Which of the following most closely represents an unrestricted random selection procedure?

In which of the following circumstances should sampling be used?

Reaching an incorrect conclusion because of reasons other than the nature of the sample is referred to as ______________________________ risk.

The following is a list of major steps in the sampling process.Indicate,using the correct letter,the phase in which each step belongs.Each phase may be associated with more than one step. A. Planning B. Performing C. Evaluating

_________________________ selection methods pick sample items in a nonsystematic manner.

What is the primary drawback with respect to the use of sampling?

In variables sampling,the risk of incorrect acceptance relates to the effectiveness of the audit examination.

Why is defining the population so important in a sampling application?

Which of the following steps would normally be performed last in a sampling application?

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

Exam 17: Overview of Sampling

Which of the following doesnot have a direct relationship with sample size?

Which of the following allows the auditor to limit the exposure to sampling risk?

The probability that an auditor's conclusion based on a sample might be different from the conclusion based on the entire population identifies the concept of:

Sampling risk has a direct relationship with sample size.

Sampling is ordinarily used when the number of items composing the population is relatively small.

Place the following steps in the sampling process in the order in which they are performed. 1 = Measure sample items 2 = Select sample items 3 = Define the population

The risk that the decision made based on the sample will differ from the decision made based on the entire population is referred to as

The audit team will choose to reduce the reliance on controls if the ___________________ is greater than the ___________________________.

Which of the following characteristics of substantive procedures is most closely associated with the use of sampling?

One of the advantages of sampling is that it is typically more effective than examining the entire population.

Which of the following most closely represents an unrestricted random selection procedure?

In which of the following circumstances should sampling be used?

Reaching an incorrect conclusion because of reasons other than the nature of the sample is referred to as ______________________________ risk.

The following is a list of major steps in the sampling process.Indicate,using the correct letter,the phase in which each step belongs.Each phase may be associated with more than one step. A. Planning B. Performing C. Evaluating

_________________________ selection methods pick sample items in a nonsystematic manner.

What is the primary drawback with respect to the use of sampling?

In variables sampling,the risk of incorrect acceptance relates to the effectiveness of the audit examination.

Why is defining the population so important in a sampling application?

Which of the following steps would normally be performed last in a sampling application?

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

The audit team will choose to reduce the reliance on controls if the _ is greater than the _________.