Question 1

Random number and systematic sampling are acceptable sample selection methods for statistical sampling.

Accepted Answer

A) True 
 B)False

Question 2

Stratification of the population into several homogeneous subpopulations generally creates audit efficiency.

Accepted Answer

A) True 
 B)False

Question 3

In testing the reasonableness of account balances,MUS sampling is preferred because it provides a smaller sample size.Which of the following are limitations of using the MUS sampling method?

Accepted Answer

A) tests for overstatement. 
B) zero and negative amounts. 
C) numerous misstatements. 
D) all of the above. 
A) tests for overstatement. 
B) zero and negative amounts. 
C) numerous misstatements. 
D) all of the above.

Question 4

For tests of control procedures the most commonly used statistical method is Attribute Sampling.

Accepted Answer

A) True 
 B)False

Question 5

When confirming receivables in testing for overstatements,there are few or no misstatements expected,and the selection is based on dollars,the auditor is likely to use

Accepted Answer

A) MUS sampling. 
B) stratified mean-per-unit sampling. 
C) ratio estimation sampling. 
D) attribute sampling. 
A) MUS sampling. 
B) stratified mean-per-unit sampling. 
C) ratio estimation sampling. 
D) attribute sampling.

Question 6

Increasing the expected failure rate will cause the sample size to increase.

Accepted Answer

A) True 
 B)False

Question 7

When an auditor uses MUS and analyzes misstatements in the lower stratum,the book value will be compared to the audit results in order to derive the:

Accepted Answer

A) audit value. 
B) tolerable misstatement. 
C) sampling interval. 
D) tainting percentage. 
A) audit value. 
B) tolerable misstatement. 
C) sampling interval. 
D) tainting percentage.

Question 8

In sample selection,haphazard selection deals with

Accepted Answer

A) each item in the population having an equal chance of selection. 
B) every nth item being selected after a random start. 
C) an arbitrary selection with no conscious bias. 
D) selecting all items on a day or week. 
A) each item in the population having an equal chance of selection. 
B) every nth item being selected after a random start. 
C) an arbitrary selection with no conscious bias. 
D) selecting all items on a day or week.

Question 9

If the statistical confidence level is 90 percent,the test of details (TD)risk is 10 percent.

Accepted Answer

A) True 
 B)False

Question 10

Audit sampling implies the gathering of evidence to use as a basis for making valid inferences about the characteristics of the population as a whole without examining every transaction.

Accepted Answer

A) True 
 B)False

Question 11

Audit sampling is the application of an audit procedure to less than 100 percent of the items within an account balance or class of transactions for the purpose of evaluating some characteristic.

Accepted Answer

A) True 
 B)False

Question 12

In the formula where I = TM - (EM ´ EEF)/RF;I is the sampling interval in number of units.

Accepted Answer

A) True 
 B)False

Question 13

Choosing sampling methods
Identify the factors that an auditor would consider when choosing between nonstatistical sampling and statistical sampling.

Accepted Answer

When choosing between statistical and no

Question 14

The auditor must define the population to which sampling relates if the auditor is to use statistical sampling for substantive tests of account balances.

Accepted Answer

A) True 
 B)False

Question 15

Upper Misstatement Limit
What is UML and how it is computed?

Accepted Answer

Upper misstatement limit (UML)is defined

Question 16

When using MUS sampling,an auditor found that the sampling interval should be $15,755.If selecting the sample manually,the auditor should round the sample interval to

Accepted Answer

A) $16,000. 
B) $15,000. 
C) $14,000. 
D) $10,000. 
A) $16,000. 
B) $15,000. 
C) $14,000. 
D) $10,000.

Question 17

When the results of sample testing conclude that there is misstatement in excess of the tolerable misstatement the auditor will usually:

Accepted Answer

A) issue a disclaimer of opinion. 
B) throw out the sample. 
C) propose adjustments to the client. 
D) disclose the misstatement in the client's financial statements. 
A) issue a disclaimer of opinion. 
B) throw out the sample. 
C) propose adjustments to the client. 
D) disclose the misstatement in the client's financial statements.

Question 18

Nonstatistical sampling may be utilized for Tests of Controls Substantive Testing

Accepted Answer

A) Yes Yes 
B) Yes No 
C) No No 
D) No Yes 
A) Yes Yes 
B) Yes No 
C) No No 
D) No Yes

Question 19

MUS sampling interval and sample size
Given the following information,calculate the sampling interval and the maximum sample size for accounts receivable when there are 650 accounts and a balance of $750,000.

Accepted Answer

The sampling interval is equal to $18,00

Question 20

The auditor is most concerned with which of the following?

Accepted Answer

A) Risk of incorrect rejection 
B) Risk of incorrect acceptance 
C) Risk of excess sample size 
D) Risk of errors in the population 
A) Risk of incorrect rejection 
B) Risk of incorrect acceptance 
C) Risk of excess sample size 
D) Risk of errors in the population

Random number and systematic sampling are acceptable sample selection methods for statistical sampling.

Stratification of the population into several homogeneous subpopulations generally creates audit efficiency.

In testing the reasonableness of account balances,MUS sampling is preferred because it provides a smaller sample size.Which of the following are limitations of using the MUS sampling method?

For tests of control procedures the most commonly used statistical method is Attribute Sampling.

When confirming receivables in testing for overstatements,there are few or no misstatements expected,and the selection is based on dollars,the auditor is likely to use

Increasing the expected failure rate will cause the sample size to increase.

When an auditor uses MUS and analyzes misstatements in the lower stratum,the book value will be compared to the audit results in order to derive the:

In sample selection,haphazard selection deals with

If the statistical confidence level is 90 percent,the test of details (TD)risk is 10 percent.

Audit sampling implies the gathering of evidence to use as a basis for making valid inferences about the characteristics of the population as a whole without examining every transaction.

Audit sampling is the application of an audit procedure to less than 100 percent of the items within an account balance or class of transactions for the purpose of evaluating some characteristic.

In the formula where I = TM - (EM ´ EEF)/RF;I is the sampling interval in number of units.

Choosing sampling methods Identify the factors that an auditor would consider when choosing between nonstatistical sampling and statistical sampling.

The auditor must define the population to which sampling relates if the auditor is to use statistical sampling for substantive tests of account balances.

Upper Misstatement Limit What is UML and how it is computed?

When using MUS sampling,an auditor found that the sampling interval should be $15,755.If selecting the sample manually,the auditor should round the sample interval to

When the results of sample testing conclude that there is misstatement in excess of the tolerable misstatement the auditor will usually:

Nonstatistical sampling may be utilized for Tests of Controls Substantive Testing

MUS sampling interval and sample size Given the following information,calculate the sampling interval and the maximum sample size for accounts receivable when there are 650 accounts and a balance of $750,000.

The auditor is most concerned with which of the following?

Auditing: Integral to the Economy

Corporate Governance and Audits

Judgmental and Ethical Decision-Making Frameworks and Associated Professional Standards

Audit Risk,business Risk,and Audit Planning

Internal Control Over Financial Reporting

Performing an Integrated Audit

A Framework for Audit Evidence

Auditing for Fraud

Auditing Revenue and Related Accounts

Audit of Acquisition and Payment Cycle and Inventory

Audit of Cash and Other Liquid Assets

Audit of Long-Lived Assets and Related Expense Accounts

Audit of Longer-Term Liabilities, equity, acquisitions, and Related-Entity Transactions, long-Term Liabilities, and Equity

Ensuring Audit Quality in Completing the Audit

Auditors Reports

Professional Liability

Advanced Topics Concerning Complex Audit Judgments

Filters

Exam 8: Tools Used in Gathering Audit Evidence

Random number and systematic sampling are acceptable sample selection methods for statistical sampling.

Stratification of the population into several homogeneous subpopulations generally creates audit efficiency.

In testing the reasonableness of account balances,MUS sampling is preferred because it provides a smaller sample size.Which of the following are limitations of using the MUS sampling method?

For tests of control procedures the most commonly used statistical method is Attribute Sampling.

When confirming receivables in testing for overstatements,there are few or no misstatements expected,and the selection is based on dollars,the auditor is likely to use

Increasing the expected failure rate will cause the sample size to increase.

When an auditor uses MUS and analyzes misstatements in the lower stratum,the book value will be compared to the audit results in order to derive the:

In sample selection,haphazard selection deals with

If the statistical confidence level is 90 percent,the test of details (TD)risk is 10 percent.

Audit sampling implies the gathering of evidence to use as a basis for making valid inferences about the characteristics of the population as a whole without examining every transaction.

Audit sampling is the application of an audit procedure to less than 100 percent of the items within an account balance or class of transactions for the purpose of evaluating some characteristic.

In the formula where I = TM - (EM ´ EEF)/RF;I is the sampling interval in number of units.

Choosing sampling methods Identify the factors that an auditor would consider when choosing between nonstatistical sampling and statistical sampling.

The auditor must define the population to which sampling relates if the auditor is to use statistical sampling for substantive tests of account balances.

Upper Misstatement Limit What is UML and how it is computed?

When using MUS sampling,an auditor found that the sampling interval should be $15,755.If selecting the sample manually,the auditor should round the sample interval to

When the results of sample testing conclude that there is misstatement in excess of the tolerable misstatement the auditor will usually:

Nonstatistical sampling may be utilized for Tests of Controls Substantive Testing

MUS sampling interval and sample size Given the following information,calculate the sampling interval and the maximum sample size for accounts receivable when there are 650 accounts and a balance of $750,000.

The auditor is most concerned with which of the following?

Auditing: Integral to the Economy

Corporate Governance and Audits

Judgmental and Ethical Decision-Making Frameworks and Associated Professional Standards

Audit Risk,business Risk,and Audit Planning

Internal Control Over Financial Reporting

Performing an Integrated Audit

A Framework for Audit Evidence

Auditing for Fraud

Auditing Revenue and Related Accounts

Audit of Acquisition and Payment Cycle and Inventory

Audit of Cash and Other Liquid Assets

Audit of Long-Lived Assets and Related Expense Accounts

Audit of Longer-Term Liabilities, equity, acquisitions, and Related-Entity Transactions, long-Term Liabilities, and Equity

Ensuring Audit Quality in Completing the Audit

Auditors Reports

Professional Liability

Advanced Topics Concerning Complex Audit Judgments

Filters