Exam 6: Sampling and Overview of the Risk Response Phase of the Audit

Michael Fernandez has decided to perform substantive procedures at a major retailer. Which one of the following is not a substantive procedure?

When conducting substantive testing, an increase in the auditor's assessment of the risk of material misstatement will result in an increase in the size of the sample.

Tests of controls are audit procedures designed to detect material misstatements at the assertion level.

When testing controls, a decrease in the sample size will occur when there is:

Sampling is not required when:

Oliver DiPietro was testing the controls of Blue Coast Wholesale Fish Market. When testing controls, which one of the following evidence gathering procedures is used?

When auditors conclude that an internal control is effective, they will rely on the control to prevent and detect a material misstatement and reduce their detailed substantive procedures.

An increase in the number of sampling units in the population will result in a decrease in the sample size.

Which of the following statements is incorrect?

Vita Zitkauskas, the senior on the audit of Magna International, was explaining how audit strategy and audit plans have an impact on tests of controls and substantive procedures. She Made two statements: Audit strategy details the audit procedures to be used when testing controls and when conducting detailed substantive audit procedures. The audit plan provides the basis for developing an audit strategy. Which statements were true, if any?

Non-statistical sampling involves random selection and probability theory to evaluate the results.

Which of the following is not an advantage of non-statistical sampling?

When evaluating sample test results, which of the following statements is incorrect?

When testing controls, the tolerable error is:

Projected error refers to the extrapolation of the errors detected when testing a sample to the population from which the sample was drawn.

Ricky Alfaro wanted to ensure that all the transactions at his client were recorded. For which assertion was he conducting these detailed substantive procedures?

Random selection involves:

Which sampling method involves the selection of items that are grouped together within the population of items available?

Richard Nucci used analytical procedures at his client, Ultimate Vacations. Which one of these is not an analytical procedure?

Christopher Mikos has been involved in testing controls at Highbridge Falls. Which of these control tests would be deemed ineffective?