Exam 8: Audit Sampling: An Overview and Application to Tests of Controls

Confidence level and sampling risk are related to sample size.

Audit sampling is commonly used for which type of audit evidence?

Your manager, Sally, believes that nonstatistical sampling is the best method to use on the audit of YaYa Corporation. You, however, believe that statistical sampling is by far the better method. In addition, you have a great deal of training in the proper use of sampling techniques. Prepare an argument to convince Sally why statistical sampling should be used.

If auditors conducting attributes sampling found that the entity deviated from a prescribed control in nine of the first 10 items examined, the auditor is most likely to

For which of the following audit tests would an auditor most likely use attributes sampling?

Which of the following statements is correct concerning statistical sampling in compliance testing?

Which of the following combinations guarantees a larger sample size?

An auditor is testing internal control procedures that are evidenced on an entity's vouchers. To select the vouchers for testing, the auditor obtains random numbers between the first and last voucher number in the period. If a random number matches the number of a voided voucher, that voucher ordinarily should be replaced by another voucher in the random sample if the voucher

A Type I error is the risk of incorrect acceptance.

As a result of tests of controls, an auditor over relied on internal control and decreased substantive testing. This overreliance occurred because the true deviation rate in the population was

For an attributes sampling plan, the tolerable deviation rate is 4%, the computed upper deviation rate is 7%, the sample deviation rate is 3%, and the risk of assessing control risk too low is 5%. Which of the following is true?

A control is deemed to be more important than thought at the time that attributes sampling parameters were set. The auditor is most likely to respond by

For a particular audit, the sample size for testing controls over the revenue cycle is relatively large. What can you infer about the desired confidence level, the tolerable deviation rate, and the expected population deviation rate?

Harvey Jones, CPA, uses statistical sampling to test control procedures. What is a benefit of using statistical sampling?

The computed upper deviation rate is

Define sampling risk and nonsampling risk.

In determining the sample size for a test of controls, an auditor should consider the expected deviation rate, desired confidence level, and the

Audit sampling is commonly used to gather scanning audit evidence.

Which of the following risks is related to effectiveness of testing?

In addition to evaluating the frequency of deviations in tests of controls, an auditor should also consider certain qualitative aspects of the deviations. The auditor most likely would give broader consideration to the implications of a deviation if it was