Question 1

Matching

Accepted Answer

The answer of Matching
  ...

Question 2

Which of the following statements best describes an inherent limitation of the monetary-unit sampling method?

Accepted Answer

A)  It can only be used for substantive testing of asset accounts. 
B)  It requires the use of a computer system to perform the required calculations. 
C)  Misstatement rates must be large and the misstatements must be overstatements. 
D)  Misstatement rates must be small and the misstatements must be overstatements. 
A)  It can only be used for substantive testing of asset accounts. 
B)  It requires the use of a computer system to perform the required calculations. 
C)  Misstatement rates must be large and the misstatements must be overstatements. 
D)  Misstatement rates must be small and the misstatements must be overstatements.

Question 3

Summarize the concept behind monetary-unit sampling (MUS).How does MUS use attribute-sampling theory?

Accepted Answer

MUS uses attribute-sampling theory to es

Question 4

An auditor is preparing to sample a client's customer receivables for overstatement.A statistical sampling method that automatically provides stratification when using systematic selection is

Accepted Answer

A)  Attribute sampling. 
B)  Ratio-estimation sampling. 
C)  Monetary-unit sampling. 
D)  Mean-per-unit sampling. 
A)  Attribute sampling. 
B)  Ratio-estimation sampling. 
C)  Monetary-unit sampling. 
D)  Mean-per-unit sampling.

Question 5

In a monetary-unit sampling plan,the upper misstatement limit is $11,200 and the risk of incorrect acceptance is 5%.This means that

Accepted Answer

A)  Tolerable misstatement is $11,200. 
B)  There is a 95% chance that the actual misstatement in the account is $11,200 or more. 
C)  There is a 95% chance that the actual misstatement in the account is $11,200. 
D)  There is a 95% chance that the actual misstatement in the account is $11,200 or less. 
A)  Tolerable misstatement is $11,200. 
B)  There is a 95% chance that the actual misstatement in the account is $11,200 or more. 
C)  There is a 95% chance that the actual misstatement in the account is $11,200. 
D)  There is a 95% chance that the actual misstatement in the account is $11,200 or less.

Question 6

Monetary-unit sampling is based on attribute sampling concepts.

Accepted Answer

A) True 
 B)False

Question 7

The use of the ratio projection is most effective when

Accepted Answer

A)  The dollar amount of the misstatement is expected to relate to the dollar amount of items tested. 
B)  A small number of differences exist in the population. 
C)  Estimating populations whose records consist of quantities but not book values. 
D)  Large understatement differences exist in the population. 
A)  The dollar amount of the misstatement is expected to relate to the dollar amount of items tested. 
B)  A small number of differences exist in the population. 
C)  Estimating populations whose records consist of quantities but not book values. 
D)  Large understatement differences exist in the population.

Question 8

Which of the following sampling methods would be used to estimate a numerical measurement of population,such as the dollar value of an account?

Accepted Answer

A)  Attributes sampling. 
B)  Stop-or-go sampling. 
C)  Classical variables sampling. 
D)  Random-number sampling. 
A)  Attributes sampling. 
B)  Stop-or-go sampling. 
C)  Classical variables sampling. 
D)  Random-number sampling.

Question 9

Which of the following most likely would be an advantage in using classical variables sampling rather than monetary-unit sampling?

Accepted Answer

A)  An estimate of the standard deviation of the population's recorded amounts is not required. 
B)  The auditor rarely needs the assistance of a computer program to design an efficient sample. 
C)  Inclusion of zero and negative balances generally does not require special design considerations. 
D)  Any amount that is individually significant is automatically identified and selected. 
A)  An estimate of the standard deviation of the population's recorded amounts is not required. 
B)  The auditor rarely needs the assistance of a computer program to design an efficient sample. 
C)  Inclusion of zero and negative balances generally does not require special design considerations. 
D)  Any amount that is individually significant is automatically identified and selected.

Question 10

Whenever a statistical method is used,a decision rule determines whether the population is acceptable.The decision rule for monetary-unit sampling is "Accept the conclusion that the book value is not misstated by a material amount if _________________________."

Accepted Answer

"Accept the conclusion that th

Question 11

Which one of the following statements is true regarding two random samples,drawn in the same way,from the same population,one of size 30 and one of size 300?

Accepted Answer

A)  The two samples are expected to have the same sample mean. 
B)  The larger sample is more likely to produce a large sample mean. 
C)  The smaller sample will have a smaller 95% confidence interval for the mean. 
D)  The smaller sample will, on average, produce a lower estimate of the variance of the population. 
A)  The two samples are expected to have the same sample mean. 
B)  The larger sample is more likely to produce a large sample mean. 
C)  The smaller sample will have a smaller 95% confidence interval for the mean. 
D)  The smaller sample will, on average, produce a lower estimate of the variance of the population.

Question 12

After a sample is drawn randomly,the allowance for sampling risk must be statistically quantified within a specified level of confidence.

Accepted Answer

A) True 
 B)False

Question 13

In monetary-unit sampling,population size is

Accepted Answer

A)  The dollar balance in an account. 
B)  The number of items in an account. 
C)  Unrelated to sample size. 
D)  Included in the denominator of the formula to determine sample size. 
A)  The dollar balance in an account. 
B)  The number of items in an account. 
C)  Unrelated to sample size. 
D)  Included in the denominator of the formula to determine sample size.

Question 14

Match between columns
                        Premises:  an individual dollar
 the total of the projected misstatement plus the allowance for sampling risk
 the account or transaction that contains the selected dollar
 the difference between monetary amounts in the client's records and amounts supported by audit evidence

Accepted Answer

The Answer of Mus logical unit and MUS Sampling unit is...

Question 15

Match each factor of sample size to (1)its relationship to sample size (A-Direct or B-Inverse)and (2)the appropriate effect on the sample size if the factor increases (C-Increase or D-Decrease).
1.Tolerable misstatement
2.Population size
3.Desired confidence level
4.Expected misstatement

Accepted Answer

1.B,D 2.A,

Question 16

Precision is a statistical measure of the maximum likely difference between the sample estimate and the true but unknown population total and is directly related to

Accepted Answer

A)  Reliability of evidence. 
B)  Relative risk. 
C)  Confidence level. 
D)  Cost benefit analysis. 
A)  Reliability of evidence. 
B)  Relative risk. 
C)  Confidence level. 
D)  Cost benefit analysis.

Question 17

Classical variables sampling uses normal distribution theory to evaluate the characteristics of a population based on sample data.

Accepted Answer

A) True 
 B)False

Question 18

You have been placed in charge of determining the sample size for an audit of accounts receivable.Your superior would like a confidence level of 99%.How does this affect your determination of sample size?
 What can you infer about the level of risk of incorrect acceptance that your superior is willing to accept?

Accepted Answer

A lot of work will be required to achiev

Question 19

In nonstatistical sampling,describe the two methods auditors use to project sample results to the population.How does an auditor determine which method to use?

Accepted Answer

With ratio projection,the auditor applie

Question 20

You are auditing accounts receivable for a small company and have found the following results:
 $$\begin{array} { | c | c | c | c | } 
\hline \text { Number and Size of Client } & \begin{array} { c } 
\text { Book Value of } \
\text { Accounts }
\end{array} & \begin{array} { c } 
\text { Book Value of } \
\text { Stratum }
\end{array} & \begin{array} { c } 
\text { Sample } \
\text { Sample }
\end{array} \
\hline 1,202 \text { accounts }  \$ 1,000 & \$ 777,504 & \$ 36,400 & \$ 34,400 \
\hline
\end{array}$$ Use ratio projection to project your results.

Accepted Answer

None

Matching

Which of the following statements best describes an inherent limitation of the monetary-unit sampling method?

Summarize the concept behind monetary-unit sampling (MUS).How does MUS use attribute-sampling theory?

An auditor is preparing to sample a client's customer receivables for overstatement.A statistical sampling method that automatically provides stratification when using systematic selection is

In a monetary-unit sampling plan,the upper misstatement limit is $11,200 and the risk of incorrect acceptance is 5%.This means that

Monetary-unit sampling is based on attribute sampling concepts.

The use of the ratio projection is most effective when

Which of the following sampling methods would be used to estimate a numerical measurement of population,such as the dollar value of an account?

Which of the following most likely would be an advantage in using classical variables sampling rather than monetary-unit sampling?

Whenever a statistical method is used,a decision rule determines whether the population is acceptable.The decision rule for monetary-unit sampling is "Accept the conclusion that the book value is not misstated by a material amount if _________________________."

Which one of the following statements is true regarding two random samples,drawn in the same way,from the same population,one of size 30 and one of size 300?

After a sample is drawn randomly,the allowance for sampling risk must be statistically quantified within a specified level of confidence.

In monetary-unit sampling,population size is

Match each factor of sample size to (1)its relationship to sample size (A-Direct or B-Inverse)and (2)the appropriate effect on the sample size if the factor increases (C-Increase or D-Decrease). 1.Tolerable misstatement 2.Population size 3.Desired confidence level 4.Expected misstatement

Precision is a statistical measure of the maximum likely difference between the sample estimate and the true but unknown population total and is directly related to

Classical variables sampling uses normal distribution theory to evaluate the characteristics of a population based on sample data.

In nonstatistical sampling,describe the two methods auditors use to project sample results to the population.How does an auditor determine which method to use?

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning,Types of Audit Tests,and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Assurance,Attestation,and Internal Auditing Services

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting Process: Long-Term Liabilities, Stockholders Equity, and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Professional Conduct,Independence,and Quality Control

Legal Liability

Assurance,Attestation,and Internal Auditing Services

Filters

Exam 9: Audit Sampling: An Application to Substantive Tests of Account Balances

Matching

Which of the following statements best describes an inherent limitation of the monetary-unit sampling method?

Summarize the concept behind monetary-unit sampling (MUS).How does MUS use attribute-sampling theory?

An auditor is preparing to sample a client's customer receivables for overstatement.A statistical sampling method that automatically provides stratification when using systematic selection is

In a monetary-unit sampling plan,the upper misstatement limit is $11,200 and the risk of incorrect acceptance is 5%.This means that

Monetary-unit sampling is based on attribute sampling concepts.

The use of the ratio projection is most effective when

Which of the following sampling methods would be used to estimate a numerical measurement of population,such as the dollar value of an account?

Which of the following most likely would be an advantage in using classical variables sampling rather than monetary-unit sampling?

Whenever a statistical method is used,a decision rule determines whether the population is acceptable.The decision rule for monetary-unit sampling is "Accept the conclusion that the book value is not misstated by a material amount if _________________________."

Which one of the following statements is true regarding two random samples,drawn in the same way,from the same population,one of size 30 and one of size 300?

After a sample is drawn randomly,the allowance for sampling risk must be statistically quantified within a specified level of confidence.

In monetary-unit sampling,population size is

Match each factor of sample size to (1)its relationship to sample size (A-Direct or B-Inverse)and (2)the appropriate effect on the sample size if the factor increases (C-Increase or D-Decrease). 1.Tolerable misstatement 2.Population size 3.Desired confidence level 4.Expected misstatement

Precision is a statistical measure of the maximum likely difference between the sample estimate and the true but unknown population total and is directly related to

Classical variables sampling uses normal distribution theory to evaluate the characteristics of a population based on sample data.

In nonstatistical sampling,describe the two methods auditors use to project sample results to the population.How does an auditor determine which method to use?

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning,Types of Audit Tests,and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Assurance,Attestation,and Internal Auditing Services

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting Process: Long-Term Liabilities, Stockholders Equity, and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Professional Conduct,Independence,and Quality Control

Legal Liability

Assurance,Attestation,and Internal Auditing Services

Filters