Question 1

The risk of assessing control risk too high is the risk that the evidence of compliance with control procedures in the sample indicates

Accepted Answer

A) Low control risk when the actual degree of compliance does not justify a low control risk assessment. 
B) Low control risk when the actual degree of compliance justifies a low control risk assessment. 
C) High control risk when the actual degree of compliance would justify a lower control risk assessment. 
D) High control risk when the actual degree of compliance would justify a higher control risk assessment. 
A) Low control risk when the actual degree of compliance does not justify a low control risk assessment. 
B) Low control risk when the actual degree of compliance justifies a low control risk assessment. 
C) High control risk when the actual degree of compliance would justify a lower control risk assessment. 
D) High control risk when the actual degree of compliance would justify a higher control risk assessment.

Question 2

The determination of an appropriate sample on a representative basis must be made using statistical methods.

Accepted Answer

A) True 
 B)False

Question 3

Sampling risk is the risk that the sample does not represent the population.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is a term used to describe a departure from a prescribed internal control procedure?

Accepted Answer

A) Exception. 
B) Event. 
C) Misstatement. 
D) Known error. 
A) Exception. 
B) Event. 
C) Misstatement. 
D) Known error.

Question 5

Calculate the projected likely misstatement (PLM) for the data given below using the average difference method and the ratio method.(Round to the nearest dollar.)

Accepted Answer

The answer of Calculate the projected likely misstatement (PLM) for...

Question 6

The risk of incorrect rejection exists both in statistical and nonstatistical sampling.

Accepted Answer

A) True 
 B)False

Question 7

In testing controls over invoices an auditor discovers that in 10% of her statistical sample invoices were sent for full shipments, even if shipping documents suggested partial shipments.In this case, she would likely:

Accepted Answer

A) Increase her sample size to determine the extent of the control weakness. 
B) Recalculate control risk to determine if there is any effect on the nature, timing or extent of her yearend procedures. 
C) Conclude that controls are working at 90% effectiveness and classify control risk as low. 
D) Consult with her partner to consider launching a fraud investigation. 
A) Increase her sample size to determine the extent of the control weakness. 
B) Recalculate control risk to determine if there is any effect on the nature, timing or extent of her yearend procedures. 
C) Conclude that controls are working at 90% effectiveness and classify control risk as low. 
D) Consult with her partner to consider launching a fraud investigation.

Question 8

The probability that an auditor's conclusion based on a sample might differ from the auditor's conclusion based on the entire population identifies the concept of

Accepted Answer

A) Sampling risk. 
B) Confidence levels. 
C) Statistical sampling. 
D) Tolerable rate and the expected deviation rate. 
A) Sampling risk. 
B) Confidence levels. 
C) Statistical sampling. 
D) Tolerable rate and the expected deviation rate.

Question 9

Non-sampling risk exists in both statistical and non-statistical sampling.

Accepted Answer

A) True 
 B)False

Question 10

The standard deviation of a population of data is a statistical measure of

Accepted Answer

A) How much data are skewed. 
B) How much data are correlated. 
C) The dispersion of data. 
D) The average value of data items. 
A) How much data are skewed. 
B) How much data are correlated. 
C) The dispersion of data. 
D) The average value of data items.

The risk of assessing control risk too high is the risk that the evidence of compliance with control procedures in the sample indicates

The determination of an appropriate sample on a representative basis must be made using statistical methods.

Sampling risk is the risk that the sample does not represent the population.

Which of the following is a term used to describe a departure from a prescribed internal control procedure?

Calculate the projected likely misstatement (PLM) for the data given below using the average difference method and the ratio method.(Round to the nearest dollar.)

The risk of incorrect rejection exists both in statistical and nonstatistical sampling.

In testing controls over invoices an auditor discovers that in 10% of her statistical sample invoices were sent for full shipments, even if shipping documents suggested partial shipments.In this case, she would likely:

The probability that an auditor's conclusion based on a sample might differ from the auditor's conclusion based on the entire population identifies the concept of

Non-sampling risk exists in both statistical and non-statistical sampling.

The standard deviation of a population of data is a statistical measure of

Introduction to Auditing

Audit, Assurance, and Quality Control Standards

Reports on Audited Financial Statements and Audited Internal Controlt

Professional Ethics and Auditor Responsibilities

Legal Liability

Preliminary Audit Planning: Understanding the Auditee

Assessing Risks and Internal Control

Audit Evidence and Assurance

Control Assessment and Testing

Revenues, Receivables, and Receipts Process

Purchases, Payables, and Payments Processtrue

Production and Payroll Process

Finance and Investment Process

Completing the Audit

Other Public Accounting Services and Reports

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Exam 10: Audit Sampling

The risk of assessing control risk too high is the risk that the evidence of compliance with control procedures in the sample indicates

The determination of an appropriate sample on a representative basis must be made using statistical methods.

Sampling risk is the risk that the sample does not represent the population.

Which of the following is a term used to describe a departure from a prescribed internal control procedure?

Calculate the projected likely misstatement (PLM) for the data given below using the average difference method and the ratio method.(Round to the nearest dollar.)

The risk of incorrect rejection exists both in statistical and nonstatistical sampling.

In testing controls over invoices an auditor discovers that in 10% of her statistical sample invoices were sent for full shipments, even if shipping documents suggested partial shipments.In this case, she would likely:

The probability that an auditor's conclusion based on a sample might differ from the auditor's conclusion based on the entire population identifies the concept of

Non-sampling risk exists in both statistical and non-statistical sampling.

The standard deviation of a population of data is a statistical measure of

Introduction to Auditing

Audit, Assurance, and Quality Control Standards

Reports on Audited Financial Statements and Audited Internal Controlt

Professional Ethics and Auditor Responsibilities

Legal Liability

Preliminary Audit Planning: Understanding the Auditee

Assessing Risks and Internal Control

Audit Evidence and Assurance

Control Assessment and Testing

Revenues, Receivables, and Receipts Process

Purchases, Payables, and Payments Processtrue

Production and Payroll Process

Finance and Investment Process

Completing the Audit

Other Public Accounting Services and Reports

Fraud Awareness Auditing

Filters