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

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

Match the following

Which of the following would be an improper technique when using monetary-unit statistical sampling in an audit of accounts receivable?

In a monetary-unit sample with a sampling interval of $10,000,an auditor discovered that a selected account receivable with a recorded amount of $5,000 had an audit amount of $2,000.The projected misstatement of this sample was

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 _______________________."

An auditor is performing substantive procedures of pricing and extension of perpetual inventory balances consisting of a large number of items.Past experience indicates numerous pricing and extension errors.Which of the following statistical sampling approaches is most appropriate?

Which of the following courses of action would an auditor most likely follow in planning a sample of cash disbursements if the auditor is aware of several unusually large cash disbursements?

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

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

The formula for nonstatistical sampling for tests of account balances provided by the AICPA

In a monetary-unit sample with a sampling interval of $5,000,an auditor discovers that a selected account receivable with a recorded amount of $10,000 has an audit amount of $8,000.If this were the only error discovered by the auditor,the projected misstatement for this sample would be

Monetary-unit sampling is commonly used by auditors to test controls.

The accounting department reports that the balance of accounts receivable is $210,000.You are willing to accept that balance if audit sampling suggests it is within $15,000 of the actual balance.Using a classical variables sampling plan,you compute a 95% confidence interval of $208,000 to $225,000.You would therefore