Exam 18: Attributes Sampling

Indicate how each of the following conditions affect the upper limit rate of deviation by using the letters I (increase),D (decrease),or N (no effect).For each condition,hold all other factors constant. 1____.An increase in the tolerable rate of deviation from 2% to 5%. 2____.A decrease in the number of deviations from 5 to 1. 3____.An increase in the risk of underreliance from 5% to 10%. 4____.A decrease in the risk of overreliance from 10% to 5%. 5____.An increase in the sample rate of deviation from 2.3% to 3.5%.

When examining the client's internal control,what is the relationship of each of the following with sample size? Axpected rate of Rist of deviatian overrelianos A Direct Direct B. Direct Irverse C. Irverse Irverse D. Inverse Direct

The purpose of tests of controls is to determine that:

As part of the assessment of control risk,the auditor decided to use audit sampling.After specifying the audit objectives,what would the auditor most likely do next?

In planning a statistical sample for a test of controls,an auditor increased the expected population deviation rate from the rates observed in prior audits because of the results of prior tests of controls and the overall control environment.The auditor most likely would then increase the planned:

Assume that the audit team established a tolerable rate of deviation of 5%,an expected population deviation rate of 1%,and desired to control the risk of overreliance to 5%.What is the appropriate sample size in this situation?

The ultimate purpose of control risk assessment is to:

The upper limit rate of deviation in attributes sampling is:

Based on relationships among these factors,identify the missing data for each of the following independent attributes sampling applications. Sarmple Size 100 (3) 200 Number of deviations (1) 2 15 Sample rate of deviation 4\% 2.5\% (5) Upper lirnit rate of deviation 8.5\% (4) 12.7\% Allowarce for sarmpling risk (2) 7.8\% (6)

The procedures for statistical evaluation of tests of controls with the AICPA Sample Evaluation Tables would not include the following step:

An auditor is examining an important internal control in his audit of ABC Company.Because the account balance affected by this control is highly susceptible to fraud,she will reject the sample if even one deviation is discovered.What type of sampling plan should she use

Which of the following statements is true regarding attributes sampling?

The risk of underreliance is the probability that the evidence in the sample indicates:

Which of the following deviations would probably be of most concern to auditors?

The audit team is planning to examine a sample of control policies and procedures.Assume that,based on the intended degree of reliance on internal control,the audit team wishes to control the risk of overreliance to 5%.In addition,based on prior engagements,the audit team anticipates an expected deviation rate of 2%.What would be the impact of reducing the tolerable rate of deviation from 7% to 5% on the sample size?

Which of the following is not a judgment or estimate auditors must make when performing attributes sampling?

An increase in which of the following would cause the sample size in a test of controls to decrease?

Using the appropriate sampling tables,identify the missing data for each of the following independent attributes sampling applications. Risk of overreliance 5\% 10\% (3) 5\% Tolerable rate of deviation 6\% (2) 7\% 6\% Expected population deviation rate 3\% 2\% 1\% (4) Expected population deviation rate (1) 132 55 150

Williams,CPA,determined that the appropriate samples size for a test of controls related to the completeness of purchase transactions was 148 items.Using the AICPA Sample Size tables,which of the following represent assessments that could have been made by Williams to determine this sample size?

Which of the following sampling risks is associated with the use of attributes sampling?