Exam 19: Variables Sampling

Which of the following components of the upper limit on misstatements is determined by multiplying the sampling interval by the confidence factor for the acceptable risk of incorrect acceptance?

Indicate whether each of the following factors is considered in determining sample size in monetary unit sampling (M),classical variables sampling (C),both (B),or neither (N). 1____.Population size. 2____.Standard deviation. 3____.Risk of incorrect acceptance. 4____.Expected misstatement. 5____.Tolerable misstatement. 6____.Risk of incorrect rejection. 7____.Tainting percentage.

An auditor discovers that an account balance believed not to be materially misstated based on an audit sample was materially misstated based on the total population of the account balance.This is an example of which of the following types of sampling risks?

In a classical variables sampling application,if the _____ exceeds the maximum difference between the recorded balance and any point within the precision interval,the auditor would decide to _____ the account balance as fairly stated.

In which of the following situations would the auditor be more likely to use monetary unit sampling as opposed to classical variables sampling?

Which of the following components of the upper limit on misstatements will exist in all monetary unit sampling applications,even in those where no misstatements are found?

Under monetary unit sampling,the sampling interval is determined by dividing the _____ by the _____.

How does the auditor establish the level of tolerable misstatement in a variables sampling application?

Which of the following is not true with respect to the effect of the population standard deviation in a classical variables sampling application?

In a variables sampling application,which of the following would not ordinarily be documented by the audit team?

Which of the following is not an advantage associated with monetary unit sampling (MUS)?

The amount by which a projected misstatement in an account balance or class of transactions differs from an actual misstatement as a result of the sample not being representative of the population would typically arise from:

Which of the following statements is not true regarding variables sampling?

Jones,CPA,used a classical variables sampling application to examine the inventory balance of XYZ Company.The recorded balance of the inventory was $240,000,and Jones determined a tolerable misstatement of $12,000.Jones' sampling procedures resulted in a precision interval of $224,000 to $236,000.As a result,Jones should conclude that the

In a classical variables sampling application,the auditor determines there is a 95 percent probability that the true (but unknown)value of an entity's accounts receivable is between $45,000 and $55,000.If the estimated population value is $50,000,the precision is

Which of the following is the least likely outcome when the upper limit on misstatements exceeds the tolerable misstatement?

The process of subdividing a population into more homogeneous subgroups is known as:

What is one of the primary benefits of stratifying a population?

A client's inventory is recorded at $300,000 and is comprised of 1,000 items.If auditors examined a sample of 200 items and found a total misstatement of $20,000 (overstatement),what is the estimated audited value for inventory?

Which of the following factors that affect sample size can be determined by considering the recorded account balance of the account or class of transactions as well as the relationship between the recorded account balance or class of transactions with important financial statement subtotals?