Question 1

Control risk is the risk that:

Accepted Answer

A)  an auditor expresses an inappropriate audit opinion when a financial statement is materially misstated. 
B)  an auditor's substantive procedures will not detect material misstatements. 
C)  a client's system of internal controls will not prevent or detect a material misstatement. 
D)  none of the above. 
A)  an auditor expresses an inappropriate audit opinion when a financial statement is materially misstated. 
B)  an auditor's substantive procedures will not detect material misstatements. 
C)  a client's system of internal controls will not prevent or detect a material misstatement. 
D)  none of the above.

Question 2

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

Accepted Answer

A)  vouching of transactions 
B)  confirmations of accounts receivable 
C)  tracing of transactions to source documents 
D)  enquiry of client personnel 
A)  vouching of transactions 
B)  confirmations of accounts receivable 
C)  tracing of transactions to source documents 
D)  enquiry of client personnel

Question 3

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

Accepted Answer

A)  occurrence 
B)  completeness 
C)  cut-off 
D)  none of the above 
A)  occurrence 
B)  completeness 
C)  cut-off 
D)  none of the above

Question 4

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

Accepted Answer

A)  systematic selection 
B)  haphazard selection 
C)  random selection 
D)  block selection 
A)  systematic selection 
B)  haphazard selection 
C)  random selection 
D)  block selection

Question 5

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

Accepted Answer

A)  It allows an auditor to select a sample that they believe is appropriate. 
B)  It allows an auditor to measure sampling risk. 
C)  It is lower cost than statistical sampling. 
D)  It requires less staff training. 
A)  It allows an auditor to select a sample that they believe is appropriate. 
B)  It allows an auditor to measure sampling risk. 
C)  It is lower cost than statistical sampling. 
D)  It requires less staff training.

Question 6

Non-sampling risk ariswhen an auditor:

Accepted Answer

A)  does not use sampling. 
B)  uses an inappropriate audit procedure. 
C)  tests all of the items in a population. 
D)  spends too much time testing the accounts most at risk of material misstatement. 
A)  does not use sampling. 
B)  uses an inappropriate audit procedure. 
C)  tests all of the items in a population. 
D)  spends too much time testing the accounts most at risk of material misstatement.

Question 7

What impact will there be on sample size when there is an increase in the number of sampling units in the population?

Accepted Answer

A)  increase 
B)  decrease 
C)  negligible 
D)  none of the above 
A)  increase 
B)  decrease 
C)  negligible 
D)  none of the above

Question 8

Explain how auditors evaluate the results of tests of controls conducted on a sample.

Accepted Answer

After an auditor has completed their aud

Question 9

When testing controls, the tolerable error is:

Accepted Answer

A)  the tolerable rate of deviation that an auditor will accept before concluding that a control is effective. 
B)  the minimum rate of deviation that an auditor will accept. 
C)  the tolerable rate of deviation that an auditor will accept before concluding that a control is ineffective. 
D)  the maximum amount of error in an account balance that an auditor will accept before concluding that an account is materially misstated. 
A)  the tolerable rate of deviation that an auditor will accept before concluding that a control is effective. 
B)  the minimum rate of deviation that an auditor will accept. 
C)  the tolerable rate of deviation that an auditor will accept before concluding that a control is ineffective. 
D)  the maximum amount of error in an account balance that an auditor will accept before concluding that an account is materially misstated.

Question 10

Sampling risk is the risk that the sample chosen by the auditor is not representative of the population available for testing.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A)  If an auditor discovers errors when testing transactions or account balances, they will need to project the error to the population being tested. 
B)  An auditor will not consider whether the population was stratified before being sampled. 
C)  If an error is considered to be unique it will be removed before projecting remaining errors to the population. 
D)  If the rate of deviation exceeds the tolerable rate the auditor will extend their testing. 
A)  If an auditor discovers errors when testing transactions or account balances, they will need to project the error to the population being tested. 
B)  An auditor will not consider whether the population was stratified before being sampled. 
C)  If an error is considered to be unique it will be removed before projecting remaining errors to the population. 
D)  If the rate of deviation exceeds the tolerable rate the auditor will extend their testing.

Question 12

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

Accepted Answer

A)  an increase in the tolerable rate of deviation. 
B)  a decrease in the tolerable rate of deviation. 
C)  an increase in the extent to which the auditor's risk assessment takes into account relevant controls. 
D)  an increase in the number of sampling units in the population. 
A)  an increase in the tolerable rate of deviation. 
B)  a decrease in the tolerable rate of deviation. 
C)  an increase in the extent to which the auditor's risk assessment takes into account relevant controls. 
D)  an increase in the number of sampling units in the population.

Question 13

Which of the following statements regarding statistical sampling is correct?

Accepted Answer

A)  It is easier to use than non-statistical sampling. 
B)  It involves haphazard selection. 
C)  It is generally used for low risk accounts. 
D)  It involves random selection. 
A)  It is easier to use than non-statistical sampling. 
B)  It involves haphazard selection. 
C)  It is generally used for low risk accounts. 
D)  It involves random selection.

Question 14

An auditor usprofessional judgment when determining the nature, timing and extent of audit procedurto use for each audit. Explain why the nature, timing and extent of audit testing are crucial factors in every audit.

Accepted Answer

An auditor uses professional judgment wh

Question 15

The timing of audit testing refers to the stage of the audit when procedurare performed and the date that audit evidence relatto.

Accepted Answer

A) True 
 B)False

Question 16

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.

Accepted Answer

A) True 
 B)False

Question 17

An account is at a higher risk of misstatement when it requires:

Accepted Answer

A)  complex calculations. 
B)  estimation. 
C)  both a and b. 
D)  simple valuation techniques. 
A)  complex calculations. 
B)  estimation. 
C)  both a and b. 
D)  simple valuation techniques.

Control risk is the risk that:

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

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

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

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

Non-sampling risk ariswhen an auditor:

What impact will there be on sample size when there is an increase in the number of sampling units in the population?

Explain how auditors evaluate the results of tests of controls conducted on a sample.

When testing controls, the tolerable error is:

Sampling risk is the risk that the sample chosen by the auditor is not representative of the population available for testing.

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

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

Which of the following statements regarding statistical sampling is correct?

An auditor usprofessional judgment when determining the nature, timing and extent of audit procedurto use for each audit. Explain why the nature, timing and extent of audit testing are crucial factors in every audit.

The timing of audit testing refers to the stage of the audit when procedurare performed and the date that audit evidence relatto.

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 account is at a higher risk of misstatement when it requires:

Introduction and Review of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Audit Planning I

Audit Planning II

Audit Evidence

Understanding and Testing the Clients System of Internal Controls

Execution of the Audit Performing Substantive Procedur

Auditing Saland Receivabl

Auditing Purchases, Payabland Payroll

Auditing Inventoriand PPE

Auditing Cash and Investments

Completing and Reporting on the Audit

Filters

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

Control risk is the risk that:

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

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

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

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

Non-sampling risk ariswhen an auditor:

What impact will there be on sample size when there is an increase in the number of sampling units in the population?

Explain how auditors evaluate the results of tests of controls conducted on a sample.

When testing controls, the tolerable error is:

Sampling risk is the risk that the sample chosen by the auditor is not representative of the population available for testing.

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

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

Which of the following statements regarding statistical sampling is correct?

An auditor usprofessional judgment when determining the nature, timing and extent of audit procedurto use for each audit. Explain why the nature, timing and extent of audit testing are crucial factors in every audit.

The timing of audit testing refers to the stage of the audit when procedurare performed and the date that audit evidence relatto.

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 account is at a higher risk of misstatement when it requires:

Introduction and Review of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Audit Planning I

Audit Planning II

Audit Evidence

Understanding and Testing the Clients System of Internal Controls

Execution of the Audit Performing Substantive Procedur

Auditing Saland Receivabl

Auditing Purchases, Payabland Payroll

Auditing Inventoriand PPE

Auditing Cash and Investments

Completing and Reporting on the Audit

Filters