Exam 14: Audit sampling

If the auditor believes that there will be more than just a few exceptions discovered and desires an accurate estimate of the dollar value of the exceptions, he or she will use:

Which one of the following is NOT a problem with monetary-unit selection?

Acceptable risk of incorrect acceptance is of greater concern to the auditor than acceptable risk of incorrect rejection.

Of the four factors which determine the initial sample size (population size, tolerable deviation rate, acceptable risk of over-reliance, and expected population deviation rate), which combination of two factors has the greatest effect on sample size?

Assessed control risk and acceptable risk of assessing control risk too low (ARO)are directly related; that is, as assessed control risk increased, ARO also increases.

Discuss what is meant by 'representative sample'.

Monetary-unit sampling selects individual dollars as the sampling unit, but in practice auditors do not audit individual dollars.

A statistical method used to estimate the proportion of items in a population containing a characteristic of interest is:

While performing a substantive test of details during an audit, the auditor determines that the sample results support the conclusion that the recorded account balance is materially misstated.It is, in fact, NOT materially misstated.This situation illustrates the risk of:

One of the ways to reduce sampling risk is to:

Which one of the following statements regarding block sampling is NOT true?

When using monetary-unit sampling, the recorded dollar population is a definition of the:

Acceptable risk of assessing control risk too low (ARO)is the auditor's measure of:

Describe the differences between statistical and non-statistical sampling in terms of the sample selection methods used and the measurement (quantification)of sampling risk.

An increase in the sample size has the effect of decreasing the sampling error if the:

Which one of the following statements is a valid criticism of the use of non-statistical sampling methods?

There are 14 steps to audit sampling for tests of controls and substantive tests of transactions.These are divided into three sections: plan the sample, select the sample and perform the audit procedures, and evaluate the results.Discuss each of the steps that comprise the 'plan the sample' section.

In monetary-unit sampling, items containing large understatement errors:

Discuss two causes of non-sampling error.Also discuss ways the auditor can control non-sampling risk.

The acceptable risk of assessing control risk too low (ARO)is a measure of the level of risk that: