Question 1

Sample size varies directly with the expected failure rate.

Accepted Answer

A) True 
 B)False

Question 2

In MUS sampling basic precision is the upper misstatement limit when no misstatements are detected in a MUS sample.It is computed by multiplying the sampling interval by the error expansion factor.

Accepted Answer

A) True 
 B)False

Question 3

In Attribute Sampling if the selected item cannot be located,the auditor considers that control procedure as not working.

Accepted Answer

A) True 
 B)False

Question 4

The upper misstatement limit is computed by adding

Accepted Answer

A) basic Precision 
B) most Likely Misstatement 
C) incremental Allowance for Sampling Error 
D) all of the above 
A) basic Precision 
B) most Likely Misstatement 
C) incremental Allowance for Sampling Error 
D) all of the above

Question 5

The design of MUS sampling requires the auditor to determine detection risk,tolerable misstatement,and the expected misstatement in the account balance.

Accepted Answer

A) True 
 B)False

Question 6

Incorrect acceptance is directly related to

Accepted Answer

A) the efficiency of the audit. 
B) the ineffectiveness of the audit. 
C) the cost of the audit. 
D) all of the above. 
A) the efficiency of the audit. 
B) the ineffectiveness of the audit. 
C) the cost of the audit. 
D) all of the above.

Question 7

The individual auditable elements defined by the auditor are the sampling units.

Accepted Answer

A) True 
 B)False

Question 8

Random number,haphazard selection and block sampling are acceptable sample selection methods for nonstatistical sampling.

Accepted Answer

A) True 
 B)False

Question 9

Attribute Sampling for testing controls should only be done by the auditor at the end of the fiscal period under audit.

Accepted Answer

A) True 
 B)False

Question 10

Factors that the auditor should consider when choosing between nonstatistical and statistical sampling include

Accepted Answer

A) whether the audit staff is adequately trained to use statistical sampling. 
B) whether the population lends itself to a random-based selection method. 
C) whether the auditor wants an objective measure of the risk of drawing a wrong conclusion. 
D) all of the above. 
A) whether the audit staff is adequately trained to use statistical sampling. 
B) whether the population lends itself to a random-based selection method. 
C) whether the auditor wants an objective measure of the risk of drawing a wrong conclusion. 
D) all of the above.

Question 11

Which one of the following is a decision the auditor needs to make about attribute sampling?

Accepted Answer

A) Management selection of sample size 
B) Period covered by testing 
C) Population size 
D) Whether to use dollar unit or variables sampling 
A) Management selection of sample size 
B) Period covered by testing 
C) Population size 
D) Whether to use dollar unit or variables sampling

Question 12

In analyzing misstatements using sampling techniques,the auditor should analyze the misstatements

Accepted Answer

A) qualitatively and quantitatively. 
B) absolutely and proportionately. 
C) haphazardly and randomly. 
D) methodically and systematically. 
A) qualitatively and quantitatively. 
B) absolutely and proportionately. 
C) haphazardly and randomly. 
D) methodically and systematically.

Question 13

One of the most rigorous approaches to analytical procedures is regression analysis.

Accepted Answer

A) True 
 B)False

Question 14

Random sampling can be used to determine sample size or evaluate sampling results even if the auditor does not plan on using statistical sampling.

Accepted Answer

A) True 
 B)False

Question 15

When performing substantive tests using sampling methods,the auditor's main concern is the risk of incorrect rejection.

Accepted Answer

A) True 
 B)False

Question 16

In sample selection,systematic 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 17

Nonsampling risk includes all of the following except

Accepted Answer

A) misinterpretation of information. 
B) use of improper audit procedure. 
C) improper projection of results to the population. 
D) carelessness of the auditor. 
E) all of the above. 
A) misinterpretation of information. 
B) use of improper audit procedure. 
C) improper projection of results to the population. 
D) carelessness of the auditor. 
E) all of the above.

Question 18

When using MUS sampling,the auditor will use which of the following formulas to determine maximum sample size?

Accepted Answer

A)  $\mathrm { n } = \frac { \text { Population market value } } { \text { Sampling interval } }$ 
B)  $\mathrm { n } = \frac { \text { Population book value } } { \text { Population interval } }$ 
C)  $\mathrm { n } = \frac { \text { Population book value } } { \text { Sampling interval } }$ 
D)  $\mathrm { n } = \frac { \text { Sample book value } } { \text { Sampling interval } }$ 
A)  $\mathrm { n } = \frac { \text { Population market value } } { \text { Sampling interval } }$ 
B)  $\mathrm { n } = \frac { \text { Population book value } } { \text { Population interval } }$ 
C)  $\mathrm { n } = \frac { \text { Population book value } } { \text { Sampling interval } }$ 
D)  $\mathrm { n } = \frac { \text { Sample book value } } { \text { Sampling interval } }$

Question 19

The expected failure rate is the auditor's best estimate of the percentage of transactions processed for which the control procedure is not effectively applied.

Accepted Answer

A) True 
 B)False

Question 20

MUS sampling is designed to test whether there is an acceptable risk of account balance understatement.

Accepted Answer

A) True 
 B)False

Sample size varies directly with the expected failure rate.

In MUS sampling basic precision is the upper misstatement limit when no misstatements are detected in a MUS sample.It is computed by multiplying the sampling interval by the error expansion factor.

In Attribute Sampling if the selected item cannot be located,the auditor considers that control procedure as not working.

The upper misstatement limit is computed by adding

The design of MUS sampling requires the auditor to determine detection risk,tolerable misstatement,and the expected misstatement in the account balance.

Incorrect acceptance is directly related to

The individual auditable elements defined by the auditor are the sampling units.

Random number,haphazard selection and block sampling are acceptable sample selection methods for nonstatistical sampling.

Attribute Sampling for testing controls should only be done by the auditor at the end of the fiscal period under audit.

Factors that the auditor should consider when choosing between nonstatistical and statistical sampling include

Which one of the following is a decision the auditor needs to make about attribute sampling?

In analyzing misstatements using sampling techniques,the auditor should analyze the misstatements

One of the most rigorous approaches to analytical procedures is regression analysis.

Random sampling can be used to determine sample size or evaluate sampling results even if the auditor does not plan on using statistical sampling.

When performing substantive tests using sampling methods,the auditor's main concern is the risk of incorrect rejection.

In sample selection,systematic selection deals with

Nonsampling risk includes all of the following except

When using MUS sampling,the auditor will use which of the following formulas to determine maximum sample size?

The expected failure rate is the auditor's best estimate of the percentage of transactions processed for which the control procedure is not effectively applied.

MUS sampling is designed to test whether there is an acceptable risk of account balance understatement.

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

Sample size varies directly with the expected failure rate.

In MUS sampling basic precision is the upper misstatement limit when no misstatements are detected in a MUS sample.It is computed by multiplying the sampling interval by the error expansion factor.

In Attribute Sampling if the selected item cannot be located,the auditor considers that control procedure as not working.

The upper misstatement limit is computed by adding

The design of MUS sampling requires the auditor to determine detection risk,tolerable misstatement,and the expected misstatement in the account balance.

Incorrect acceptance is directly related to

The individual auditable elements defined by the auditor are the sampling units.

Random number,haphazard selection and block sampling are acceptable sample selection methods for nonstatistical sampling.

Attribute Sampling for testing controls should only be done by the auditor at the end of the fiscal period under audit.

Factors that the auditor should consider when choosing between nonstatistical and statistical sampling include

Which one of the following is a decision the auditor needs to make about attribute sampling?

In analyzing misstatements using sampling techniques,the auditor should analyze the misstatements

One of the most rigorous approaches to analytical procedures is regression analysis.

Random sampling can be used to determine sample size or evaluate sampling results even if the auditor does not plan on using statistical sampling.

When performing substantive tests using sampling methods,the auditor's main concern is the risk of incorrect rejection.

In sample selection,systematic selection deals with

Nonsampling risk includes all of the following except

When using MUS sampling,the auditor will use which of the following formulas to determine maximum sample size?

The expected failure rate is the auditor's best estimate of the percentage of transactions processed for which the control procedure is not effectively applied.

MUS sampling is designed to test whether there is an acceptable risk of account balance understatement.

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