Question 1

Which of the following is the most likely outcome when the upper limit rate of deviation is less than the tolerable rate of deviation?

Accepted Answer

A) The auditor would be exposed to the risk of overreliance. 
B) The auditor would decide to reduce the planned degree of reliance on internal control. 
C) The auditor would increase the extent of further audit procedures. 
D) The auditor would be exposed to a potential efficiency loss. 
A) The auditor would be exposed to the risk of overreliance. 
B) The auditor would decide to reduce the planned degree of reliance on internal control. 
C) The auditor would increase the extent of further audit procedures. 
D) The auditor would be exposed to a potential efficiency loss.

Question 2

Carson,CPA,judged that his test of controls of the company's 10,000 sales transactions should be based on a risk of overreliance of 10%,a tolerable rate of deviation of 8%,and an expected population deviation rate of 3.75%.Using the AICPA Sample Size tables,which of the following modifications would not affect Carson's sample size?

Accepted Answer

A) Decrease in the risk of overreliance from 10% to 5%. 
B) Increase in the tolerable rate of deviation from 8% to 10%. 
C) Increase in the expected population deviation rate from 3.75% to 4%. 
D) Decrease in the tolerable rate of deviation from 8% to 7%. 
A) Decrease in the risk of overreliance from 10% to 5%. 
B) Increase in the tolerable rate of deviation from 8% to 10%. 
C) Increase in the expected population deviation rate from 3.75% to 4%. 
D) Decrease in the tolerable rate of deviation from 8% to 7%.

Question 3

Which of the following is the audit team's primary objective in selecting an attributes sampling selection method?

Accepted Answer

A) To provide a high probability of selecting at least one item containing a deviation. 
B) To select a sample that is representative of the population from which it is drawn. 
C) To select controls applied to larger dollar transactions for examination. 
D) To select controls applied to transactions that are more likely to contain deviations. 
A) To provide a high probability of selecting at least one item containing a deviation. 
B) To select a sample that is representative of the population from which it is drawn. 
C) To select controls applied to larger dollar transactions for examination. 
D) To select controls applied to transactions that are more likely to contain deviations.

Question 4

Indicate whether each of the following characteristics relate to the risk of overreliance (O),risk of underreliance (U),both (B),or neither (N).
1____.Is specifically considered by the auditor in determining sample size and evaluating sample results.
2____.Is characterized by the auditor's sample indicating that the control is functioning effectively.
3____.Results in the auditor drawing an incorrect conclusion with respect to the population being examined.
4____.Is also referred to as the risk of assessing control risk too high.
5____.Results in an effectiveness loss to the auditor.
6____.Is used to determine the appropriate sample selection method.
7____.Is characterized by the population deviation rate being less than the tolerable rate of deviation.
8____.Is an example of a sampling risk to which the auditor is exposed when performing tests of controls.

Accepted Answer

1.O; 2.O;

Question 5

Which of the following statements is true when selecting a sample of invoices from a population to perform tests of controls?

Accepted Answer

A) The audit team should select a few more items than needed to replace any cases in which an invoice is missing or destroyed. 
B) If the audit team wishes to use statistical sampling,either block or haphazard selection is appropriate. 
C) Computerized audit techniques can be used to define the population but not to select sample items. 
D) The audit team's goal in selecting a sample is to increase the likelihood that it is representative of the population. 
A) The audit team should select a few more items than needed to replace any cases in which an invoice is missing or destroyed. 
B) If the audit team wishes to use statistical sampling,either block or haphazard selection is appropriate. 
C) Computerized audit techniques can be used to define the population but not to select sample items. 
D) The audit team's goal in selecting a sample is to increase the likelihood that it is representative of the population.

Question 6

In the study of internal control,the auditor uses sampling to compare the ____ to the _____.

Accepted Answer

A) Error; overall materiality level. 
B) Sampling risk; precision. 
C) Deviation rate; tolerable rate of deviation. 
D) Precision interval; upper limit on misstatement. 
A) Error; overall materiality level. 
B) Sampling risk; precision. 
C) Deviation rate; tolerable rate of deviation. 
D) Precision interval; upper limit on misstatement.

Which of the following is the most likely outcome when the upper limit rate of deviation is less than the tolerable rate of deviation?

Which of the following is the audit team's primary objective in selecting an attributes sampling selection method?

Which of the following statements is true when selecting a sample of invoices from a population to perform tests of controls?

In the study of internal control,the auditor uses sampling to compare the to the _.

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 Audits, Governmental Audits, and Fraud Examinations

Overview of Sampling

Variables Sampling

Auditing and Information Technology

Filters

Exam 18: Attributes Sampling

Which of the following is the most likely outcome when the upper limit rate of deviation is less than the tolerable rate of deviation?

Which of the following is the audit team's primary objective in selecting an attributes sampling selection method?

Which of the following statements is true when selecting a sample of invoices from a population to perform tests of controls?

In the study of internal control,the auditor uses sampling to compare the ____ to the _____.

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 Audits, Governmental Audits, and Fraud Examinations

Overview of Sampling

Variables Sampling

Auditing and Information Technology

Filters

In the study of internal control,the auditor uses sampling to compare the to the _.