Question 1

To determine the sample size for tests of controls,the auditor needs to estimate the following information based on his professional judgment

Accepted Answer

A) the relative rate of deviation for the population to be tested 
B) the expected rate of deviation for the population to be tested 
C) the desired level of assurance that the actual rate of deviation is not exceeded by the tolerable rate of deviation 
D) the number of sampling units in the population if the population is very large 
A) the relative rate of deviation for the population to be tested 
B) the expected rate of deviation for the population to be tested 
C) the desired level of assurance that the actual rate of deviation is not exceeded by the tolerable rate of deviation 
D) the number of sampling units in the population if the population is very large

Question 2

The auditing standards require the auditor to consider the qualitative aspects of misstatements.These include

Accepted Answer

A) amount and cause of the misstatement 
B) nature and cause of the misstatement 
C) probable relationship of the misstatement to other parts of the audit 
D) possible relationship of the misstatement to other parts of the audit 
E) probable relationship of the misstatement to other misstatements
F)both A and B
G)both B and C
H)Both B and D 
A) amount and cause of the misstatement 
B) nature and cause of the misstatement 
C) probable relationship of the misstatement to other parts of the audit 
D) possible relationship of the misstatement to other parts of the audit 
E) probable relationship of the misstatement to other misstatements
F)both A and B
G)both B and C
H)Both B and D

Question 3

Which is the more serious error,the error related to effectiveness or the error related to efficiency?

Accepted Answer

The more serious error is related to the

Question 4

The more serious error of assessing control risk too low or assessing control risk too high is the error related to the

Accepted Answer

A) relevance of the audit 
B) reliability of the audit 
C) effectiveness of the audit 
D) efficiency of the audit 
A) relevance of the audit 
B) reliability of the audit 
C) effectiveness of the audit 
D) efficiency of the audit

Question 5

The sample size can be determined once the auditor specifies

Accepted Answer

A) the tolerable rate of exceptions 
B) the expected rate of exceptions 
C) the desired level of assurance 
D) the actual rate of deviation 
E) the tolerable rate of deviation
F)both A and B
G)both C and E
H)both D and E 
A) the tolerable rate of exceptions 
B) the expected rate of exceptions 
C) the desired level of assurance 
D) the actual rate of deviation 
E) the tolerable rate of deviation
F)both A and B
G)both C and E
H)both D and E

Question 6

When an auditor uses sampling for tests of controls to gather evidence,he or she applies which of the following internal control procedures to the sample?

Accepted Answer

A) reperformance 
B) recalculation 
C) confirmation 
D) reconciliations 
E) physical controls that limit access to assets 
A) reperformance 
B) recalculation 
C) confirmation 
D) reconciliations 
E) physical controls that limit access to assets

Question 7

To determine the sample size for tests of controls,the auditor needs to estimate the following information based on his professional judgment

Accepted Answer

A) the relative rate of deviation for the population to be tested 
B) the realizable rate of deviation for the population to be tested 
C) the desired level of assurance that the actual rate of deviation is not exceeded by the tolerable rate of deviation 
D) the number of sampling units in the population if the population is very small,less than 500 
A) the relative rate of deviation for the population to be tested 
B) the realizable rate of deviation for the population to be tested 
C) the desired level of assurance that the actual rate of deviation is not exceeded by the tolerable rate of deviation 
D) the number of sampling units in the population if the population is very small,less than 500

Question 8

When controls do not "work"

Accepted Answer

A) the auditor increases the amount of substantive testing 
B) the auditor reduces the amount of substantive testing 
C) the auditor increases the amount of substantive testing over what would have been done if the control had been effective in preventing or detecting misstatements in the financial statements 
D) the auditor decreases the amount of substantive testing over what would have been done if the control had been effective in preventing or detecting misstatements in the financial statements 
A) the auditor increases the amount of substantive testing 
B) the auditor reduces the amount of substantive testing 
C) the auditor increases the amount of substantive testing over what would have been done if the control had been effective in preventing or detecting misstatements in the financial statements 
D) the auditor decreases the amount of substantive testing over what would have been done if the control had been effective in preventing or detecting misstatements in the financial statements

Question 9

Which of the following is not a method for selecting a sample for a test of controls?

Accepted Answer

A) simple random sample 
B) haphazard sampling 
C) complex random sampling 
D) systematic random sampling 
A) simple random sample 
B) haphazard sampling 
C) complex random sampling 
D) systematic random sampling

Question 10

Which of the following is an internal control procedure?

Accepted Answer

A) segregation of controls 
B) authorization procedures 
C) reliable transaction trails 
D) independent reconciliations 
E) relevant controls that limit access to assets
F)both A and C
G)both A and E
H)Both B and D 
A) segregation of controls 
B) authorization procedures 
C) reliable transaction trails 
D) independent reconciliations 
E) relevant controls that limit access to assets
F)both A and C
G)both A and E
H)Both B and D

Question 11

The evidence requirement in the auditing standards (AU 350 and ISA 530)is to

Accepted Answer

A) gather relevant and accurate evidence 
B) gather reliable and verifiable evidence 
C) gather sufficient appropriate evidence 
D) gather current and complete evidence 
A) gather relevant and accurate evidence 
B) gather reliable and verifiable evidence 
C) gather sufficient appropriate evidence 
D) gather current and complete evidence

Question 12

When the auditor uses a nonstatistical sampling for the internal control test,

Accepted Answer

A) the auditor uses judgment to determine the allowance for non-sampling risk 
B) the auditor uses judgment to determine the allowance for sampling risk 
C) the statistical program will calculate an allowance for sampling risk 
D) the statistical program will calculate an allowance for non-sampling risk 
A) the auditor uses judgment to determine the allowance for non-sampling risk 
B) the auditor uses judgment to determine the allowance for sampling risk 
C) the statistical program will calculate an allowance for sampling risk 
D) the statistical program will calculate an allowance for non-sampling risk

Question 13

To determine the sample size for tests of controls,the auditor needs to estimate the following information based on his professional judgment

Accepted Answer

A) the relative rate of deviation for the population to be tested 
B) the realizable rate of deviation for the population to be tested 
C) the desired level of assurance that the tolerable rate of deviation is not exceeded by the actual rate of deviation 
D) the number of sampling units in the population if the population is very large 
A) the relative rate of deviation for the population to be tested 
B) the realizable rate of deviation for the population to be tested 
C) the desired level of assurance that the tolerable rate of deviation is not exceeded by the actual rate of deviation 
D) the number of sampling units in the population if the population is very large

Question 14

For internal controls testing,

Accepted Answer

A) the sample size is usually larger than for substantive testing 
B) the size of the population usually has no effect on the sample size 
C) the sample size is usually smaller than for substantive testing 
D) as the size of the population increases,the sample size increases 
A) the sample size is usually larger than for substantive testing 
B) the size of the population usually has no effect on the sample size 
C) the sample size is usually smaller than for substantive testing 
D) as the size of the population increases,the sample size increases

Question 15

A statistical sample includes

Accepted Answer

A) a random selection of sample techniques,including the measurement of sampling risk 
B) a random selection of sample items 
C) the use of a statistical technique to evaluate the sample items,including the measurement of sampling risk 
D) the use of a statistical technique to obtain the sample results,including the measurement of sampling risk 
E) the use of a statistical technique to evaluate the sample results,including the measurement of sampling risk
F)both A and C
G)both B and E
H)both B and D 
A) a random selection of sample techniques,including the measurement of sampling risk 
B) a random selection of sample items 
C) the use of a statistical technique to evaluate the sample items,including the measurement of sampling risk 
D) the use of a statistical technique to obtain the sample results,including the measurement of sampling risk 
E) the use of a statistical technique to evaluate the sample results,including the measurement of sampling risk
F)both A and C
G)both B and E
H)both B and D

Question 16

The auditor should consider which of the following factors in selecting the correct sample size?

Accepted Answer

A) More testing will be required for manual controls than automated controls because manual controls are more prone to human error.IT controls that have been tested should continue to be reliable. 
B) The more transactions in a system,the more items need to be tested. 
C) The more assurance we receive from other audit procedures,the less the control is tested. 
D) The less susceptible the control is to management override,the more the control is tested. 
E) The more frequently a control is performed,the less items are tested.More internal control tests are performed for controls that are performed monthly than for controls performed daily.
F)both A and C
G)both B and D
H)both C and E 
A) More testing will be required for manual controls than automated controls because manual controls are more prone to human error.IT controls that have been tested should continue to be reliable. 
B) The more transactions in a system,the more items need to be tested. 
C) The more assurance we receive from other audit procedures,the less the control is tested. 
D) The less susceptible the control is to management override,the more the control is tested. 
E) The more frequently a control is performed,the less items are tested.More internal control tests are performed for controls that are performed monthly than for controls performed daily.
F)both A and C
G)both B and D
H)both C and E

Question 17

A sequential sampling plan usually consists of two to four groups.Once the auditor has considered control deviations in the first group of sampling units,he decides whether to

Accepted Answer

A) accept the assessed level of control risk as planned,without examining additional sampling units 
B) stop sampling because the tolerable rate of deviation cannot be achieved 
C) examine additional sampling units because sufficient information to support the assessed level of inherent risk has not been found 
D) sample additional units until the tolerable rate of deviation is achieved 
E) examine additional sampling units because sufficient information to support the actual level of control risk has not been found
F)both A and B
G)both B and E
H)both C and D 
A) accept the assessed level of control risk as planned,without examining additional sampling units 
B) stop sampling because the tolerable rate of deviation cannot be achieved 
C) examine additional sampling units because sufficient information to support the assessed level of inherent risk has not been found 
D) sample additional units until the tolerable rate of deviation is achieved 
E) examine additional sampling units because sufficient information to support the actual level of control risk has not been found
F)both A and B
G)both B and E
H)both C and D

To determine the sample size for tests of controls,the auditor needs to estimate the following information based on his professional judgment

The auditing standards require the auditor to consider the qualitative aspects of misstatements.These include

Which is the more serious error,the error related to effectiveness or the error related to efficiency?

The more serious error of assessing control risk too low or assessing control risk too high is the error related to the

The sample size can be determined once the auditor specifies

When an auditor uses sampling for tests of controls to gather evidence,he or she applies which of the following internal control procedures to the sample?

To determine the sample size for tests of controls,the auditor needs to estimate the following information based on his professional judgment

When controls do not "work"

Which of the following is not a method for selecting a sample for a test of controls?

Which of the following is an internal control procedure?

The evidence requirement in the auditing standards (AU 350 and ISA 530)is to

When the auditor uses a nonstatistical sampling for the internal control test,

To determine the sample size for tests of controls,the auditor needs to estimate the following information based on his professional judgment

For internal controls testing,

A statistical sample includes

The auditor should consider which of the following factors in selecting the correct sample size?

A sequential sampling plan usually consists of two to four groups.Once the auditor has considered control deviations in the first group of sampling units,he decides whether to

What Is Auditing

The Audit Planning Process: Understanding the Risk of Material Misstatement

Internal Controls

Auditing the Revenue Business Process

Audit Evidence and the Auditors Responsibility for Fraud Detection

Auditing the Acquisition and Expenditure Business Process

Auditing the Inventory Business Process

Audit Sampling: Substantive Tests of Details

Cash and Investment Business Processes

Long-Term Debt and Owners Equity Business Process

Completing the Audit

Audit Reports

The Auditing Profession Glossary

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Exam 8: Audit Sampling: Tests of Internal Controls

To determine the sample size for tests of controls,the auditor needs to estimate the following information based on his professional judgment

The auditing standards require the auditor to consider the qualitative aspects of misstatements.These include

Which is the more serious error,the error related to effectiveness or the error related to efficiency?

The more serious error of assessing control risk too low or assessing control risk too high is the error related to the

The sample size can be determined once the auditor specifies

When an auditor uses sampling for tests of controls to gather evidence,he or she applies which of the following internal control procedures to the sample?

To determine the sample size for tests of controls,the auditor needs to estimate the following information based on his professional judgment

When controls do not "work"

Which of the following is not a method for selecting a sample for a test of controls?

Which of the following is an internal control procedure?

The evidence requirement in the auditing standards (AU 350 and ISA 530)is to

When the auditor uses a nonstatistical sampling for the internal control test,

To determine the sample size for tests of controls,the auditor needs to estimate the following information based on his professional judgment

For internal controls testing,

A statistical sample includes

The auditor should consider which of the following factors in selecting the correct sample size?

A sequential sampling plan usually consists of two to four groups.Once the auditor has considered control deviations in the first group of sampling units,he decides whether to

What Is Auditing

The Audit Planning Process: Understanding the Risk of Material Misstatement

Internal Controls

Auditing the Revenue Business Process

Audit Evidence and the Auditors Responsibility for Fraud Detection

Auditing the Acquisition and Expenditure Business Process

Auditing the Inventory Business Process

Audit Sampling: Substantive Tests of Details

Cash and Investment Business Processes

Long-Term Debt and Owners Equity Business Process

Completing the Audit

Audit Reports

The Auditing Profession Glossary

Filters