Question 1

A sample selection method in which items are selected in a nonsystematic manner is referred to as:

Accepted Answer

A) Block selection 
B) Haphazard selection. 
C) Systematic random selection. 
D) Unrestricted random selection. 
A) Block selection 
B) Haphazard selection. 
C) Systematic random selection. 
D) Unrestricted random selection.

Question 2

Which of the following statements is true about haphazard selection?

Accepted Answer

A) Under haphazard selection,bias in selecting items (either conscious or unconscious)often exists. 
B) Haphazard selection can be described in sufficient detail to allow sample selection to be replicated by others. 
C) Under haphazard selection,the items are selected in an unstructured and careless manner. 
D) Haphazard selection allows individuals to measure the probability of selecting sample items. 
A) Under haphazard selection,bias in selecting items (either conscious or unconscious)often exists. 
B) Haphazard selection can be described in sufficient detail to allow sample selection to be replicated by others. 
C) Under haphazard selection,the items are selected in an unstructured and careless manner. 
D) Haphazard selection allows individuals to measure the probability of selecting sample items.

Question 3

If the upper limit rate of deviation exceeds the tolerable rate of deviation,the auditor would most likely:

Accepted Answer

A) Accept the account balance as fairly stated. 
B) Reject the account balance as fairly stated. 
C) Increase the planned effectiveness of substantive procedures. 
D) Not increase the planned effectiveness of substantive procedures. 
A) Accept the account balance as fairly stated. 
B) Reject the account balance as fairly stated. 
C) Increase the planned effectiveness of substantive procedures. 
D) Not increase the planned effectiveness of substantive procedures.

Question 4

Which of the following would typically result in nonsampling risk?

Accepted Answer

A) Selecting a nonrepresentative sample. 
B) Making a mistake in recording sample results. 
C) Intentionally omitting several items in the population from examination. 
D) None of the above result in nonsampling risk. 
A) Selecting a nonrepresentative sample. 
B) Making a mistake in recording sample results. 
C) Intentionally omitting several items in the population from examination. 
D) None of the above result in nonsampling risk.

Question 5

Which of the following would be an example of an action that exposes an auditor to nonsampling risk?

Accepted Answer

A) The audit team draws a sample of transactions from throughout the entire period under audit. 
B) The audit team uses an inappropriate type of audit procedure to evaluate sample evidence. 
C) The audit team uses professional judgment in evaluating sample results. 
D) The audit team limits the selection of sample items to larger dollar balances in an account. 
A) The audit team draws a sample of transactions from throughout the entire period under audit. 
B) The audit team uses an inappropriate type of audit procedure to evaluate sample evidence. 
C) The audit team uses professional judgment in evaluating sample results. 
D) The audit team limits the selection of sample items to larger dollar balances in an account.

Question 6

Nonsampling risk can occur in which of the following types of sampling plans:

Accepted Answer

A) Statistical sampling: Yes; Nonstatistical sampling: Yes 
B) Statistical sampling: Yes; Nonstatistical sampling: No 
C) Statistical sampling: No; Nonstatistical sampling: Yes 
D) Statistical sampling: No; Nonstatistical sampling: No 
A) Statistical sampling: Yes; Nonstatistical sampling: Yes 
B) Statistical sampling: Yes; Nonstatistical sampling: No 
C) Statistical sampling: No; Nonstatistical sampling: Yes 
D) Statistical sampling: No; Nonstatistical sampling: No

Question 7

Which of the following appropriately describes the effect of sample size on sampling risk?

Accepted Answer

A) Selecting a smaller sample decreases sampling risk. 
B) Selecting a larger sample increases sampling risk. 
C) Selecting a smaller sample increases sampling risk. 
D) The size of a sample is unrelated to sampling risk. 
A) Selecting a smaller sample decreases sampling risk. 
B) Selecting a larger sample increases sampling risk. 
C) Selecting a smaller sample increases sampling risk. 
D) The size of a sample is unrelated to sampling risk.

Question 8

Meghan, CPA, selected every 10th item in a randomly ordered population.

Accepted Answer

A)     Unrestricted random selection. 
B)     Systematic random selection. 
C)     Haphazard selection. 
D)     Block selection. 
A)     Unrestricted random selection. 
B)     Systematic random selection. 
C)     Haphazard selection. 
D)     Block selection.

Question 9

The type of sampling most frequently used by the auditors during their substantive procedures is referred to as:

Accepted Answer

A) Account balance sampling. 
B) Attributes sampling. 
C) Item sampling. 
D) Variables sampling. 
A) Account balance sampling. 
B) Attributes sampling. 
C) Item sampling. 
D) Variables sampling.

Question 10

Which of the following statements about audit sampling risks is correct?

Accepted Answer

A) Nonsampling risk arises from the possibility that,when a substantive test is related to a sample of items,conclusions might be different than if the auditor had tested each item in the population. 
B) Nonsampling risk can arise because an auditor failed to recognize misstatements. 
C) Sampling risk is derived from the uncertainty in applying audit procedures to specific risks. 
D) Sampling risk includes the possibility of selecting audit procedures that are not appropriate to achieve the specific objective. 
A) Nonsampling risk arises from the possibility that,when a substantive test is related to a sample of items,conclusions might be different than if the auditor had tested each item in the population. 
B) Nonsampling risk can arise because an auditor failed to recognize misstatements. 
C) Sampling risk is derived from the uncertainty in applying audit procedures to specific risks. 
D) Sampling risk includes the possibility of selecting audit procedures that are not appropriate to achieve the specific objective.

Question 11

In sampling,an individual makes a statement about a _____ of interest by examining a _____ (or subset)of items

Accepted Answer

A) Sample; population. 
B) Sampling unit; population. 
C) Population; sample. 
D) Population; sampling unit. 
A) Sample; population. 
B) Sampling unit; population. 
C) Population; sample. 
D) Population; sampling unit.

Question 12

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 13

The audit team decided to reduce planned reliance on internal controls based on the results of attributes sampling.However,the actual rate of deviation in the population is lower than the tolerable rate of deviation.Which type of risk and loss is the audit team exposed to?

Accepted Answer

A) Risk of overreliance; efficiency loss. 
B) Risk of underreliance; effectiveness loss. 
C) Risk of overreliance; effectiveness loss. 
D) Risk of underreliance; efficiency loss. 
A) Risk of overreliance; efficiency loss. 
B) Risk of underreliance; effectiveness loss. 
C) Risk of overreliance; effectiveness loss. 
D) Risk of underreliance; efficiency loss.

Question 14

Courtney, CPA, selected a sample of invoices associated with customer files drawn nonsystematically from a file drawer.

Accepted Answer

A)     Unrestricted random selection. 
B)     Systematic random selection. 
C)     Haphazard selection. 
D)     Block selection. 
A)     Unrestricted random selection. 
B)     Systematic random selection. 
C)     Haphazard selection. 
D)     Block selection.

Question 15

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

Accepted Answer

A) Inspecting purchase orders for proper approval by supervisors. 
B) Making an independent estimate of recorded payroll expense. 
C) Determining that all payables are recorded at year end. 
D) Selecting accounts receivable for confirmation of account balances. 
A) Inspecting purchase orders for proper approval by supervisors. 
B) Making an independent estimate of recorded payroll expense. 
C) Determining that all payables are recorded at year end. 
D) Selecting accounts receivable for confirmation of account balances.

Question 16

Which of the following actions can be used to control the audit team's exposure to sampling risk? $\begin{array}{cc}
&\text { Determining an } & \text { Performing appropriate } \
&\text { appropriate sample } & \text { types of andit } \
&\text { size } & \text { Procedures } \
A.&\text { Yes } & \text { No } \
B.&\text { Yes } & \text { Yes } \
C.&\text { No } & \text { Yes } \
D.&\text { No } & \text { No }
\end{array}$

Accepted Answer

The answer of Which of the following actions can be...

Question 17

An auditor is most likely to use statistical sampling under which of the following situations?

Accepted Answer

A) Random numbers can be associated with population items. 
B) Strictly defensible results based on mathematics are not necessary. 
C) The auditor has a very good knowledge of the population. 
D) The population is very diverse with some segments especially prone to misstatement. 
A) Random numbers can be associated with population items. 
B) Strictly defensible results based on mathematics are not necessary. 
C) The auditor has a very good knowledge of the population. 
D) The population is very diverse with some segments especially prone to misstatement.

Question 18

Which of the following risks expose the auditor to effectiveness losses?

Accepted Answer

A) Risk of underreliance,risk of incorrect acceptance. 
B) Risk of overreliance,risk of incorrect rejection. 
C) Risk of underreliance,risk of incorrect rejection. 
D) Risk of overreliance,risk of incorrect acceptance. 
A) Risk of underreliance,risk of incorrect acceptance. 
B) Risk of overreliance,risk of incorrect rejection. 
C) Risk of underreliance,risk of incorrect rejection. 
D) Risk of overreliance,risk of incorrect acceptance.

Question 19

Which of the following components of the audit risk model is most closely associated with variables sampling?

Accepted Answer

A) Audit risk. 
B) Risk of material misstatement. 
C) Detection risk. 
D) Analytical procedures risk. 
A) Audit risk. 
B) Risk of material misstatement. 
C) Detection risk. 
D) Analytical procedures risk.

Question 20

Which of the following is not a criterion for using a selection method with statistical sampling?

Accepted Answer

A) The method provides a reasonable likelihood of selecting a representative sample. 
B) The method allows the probability of selecting sample items to be determined. 
C) The method specifically identifies each item in the population with a number. 
D) The method allows the selection process to be replicated. 
A) The method provides a reasonable likelihood of selecting a representative sample. 
B) The method allows the probability of selecting sample items to be determined. 
C) The method specifically identifies each item in the population with a number. 
D) The method allows the selection process to be replicated.

A sample selection method in which items are selected in a nonsystematic manner is referred to as:

Which of the following statements is true about haphazard selection?

If the upper limit rate of deviation exceeds the tolerable rate of deviation,the auditor would most likely:

Which of the following would typically result in nonsampling risk?

Which of the following would be an example of an action that exposes an auditor to nonsampling risk?

Nonsampling risk can occur in which of the following types of sampling plans:

Which of the following appropriately describes the effect of sample size on sampling risk?

Meghan, CPA, selected every 10th item in a randomly ordered population.

The type of sampling most frequently used by the auditors during their substantive procedures is referred to as:

Which of the following statements about audit sampling risks is correct?

In sampling,an individual makes a statement about a _ of interest by examining a _ (or subset)of items

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:

The audit team decided to reduce planned reliance on internal controls based on the results of attributes sampling.However,the actual rate of deviation in the population is lower than the tolerable rate of deviation.Which type of risk and loss is the audit team exposed to?

Courtney, CPA, selected a sample of invoices associated with customer files drawn nonsystematically from a file drawer.

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

Which of the following actions can be used to control the audit team's exposure to sampling risk? Determining an Performing appropriate appropriate sample types of andit size Procedures A. Yes No B. Yes Yes C. No Yes D. No No

An auditor is most likely to use statistical sampling under which of the following situations?

Which of the following risks expose the auditor to effectiveness losses?

Which of the following components of the audit risk model is most closely associated with variables sampling?

Which of the following is not a criterion for using a selection method with statistical sampling?

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

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Exam 17: Overview of Sampling

A sample selection method in which items are selected in a nonsystematic manner is referred to as:

Which of the following statements is true about haphazard selection?

If the upper limit rate of deviation exceeds the tolerable rate of deviation,the auditor would most likely:

Which of the following would typically result in nonsampling risk?

Which of the following would be an example of an action that exposes an auditor to nonsampling risk?

Nonsampling risk can occur in which of the following types of sampling plans:

Which of the following appropriately describes the effect of sample size on sampling risk?

Meghan, CPA, selected every 10th item in a randomly ordered population.

The type of sampling most frequently used by the auditors during their substantive procedures is referred to as:

Which of the following statements about audit sampling risks is correct?

In sampling,an individual makes a statement about a _____ of interest by examining a _____ (or subset)of items

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:

The audit team decided to reduce planned reliance on internal controls based on the results of attributes sampling.However,the actual rate of deviation in the population is lower than the tolerable rate of deviation.Which type of risk and loss is the audit team exposed to?

Courtney, CPA, selected a sample of invoices associated with customer files drawn nonsystematically from a file drawer.

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

Which of the following actions can be used to control the audit team's exposure to sampling risk? Determining an Performing appropriate appropriate sample types of andit size Procedures A. Yes No B. Yes Yes C. No Yes D. No No

An auditor is most likely to use statistical sampling under which of the following situations?

Which of the following risks expose the auditor to effectiveness losses?

Which of the following components of the audit risk model is most closely associated with variables sampling?

Which of the following is not a criterion for using a selection method with statistical sampling?

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

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

In sampling,an individual makes a statement about a _ of interest by examining a _ (or subset)of items