Question 1

Discuss each of the six possible courses of action the auditor can take when he or she has concluded that the population is misstated by more than a tolerable amount.

Accepted Answer

The six possible courses of action the a

Question 2

The initial sample size is so-called because:

Accepted Answer

A)  the auditor must take several samples to ensure randomness. 
B)  there is always another sample to be done. 
C)  the deviations must be evaluated before deciding whether the sample is sufficiently large to achieve the objectives. 
D)  the auditor must take several samples to ensure that the final sample is representative of the population. 
A)  the auditor must take several samples to ensure randomness. 
B)  there is always another sample to be done. 
C)  the deviations must be evaluated before deciding whether the sample is sufficiently large to achieve the objectives. 
D)  the auditor must take several samples to ensure that the final sample is representative of the population.

Question 3

The variables sampling method which generally results in smaller sample sizes than any other method is:

Accepted Answer

A)  monetary-unit sampling. 
B)  mean-per-unit estimation. 
C)  difference estimation. 
D)  ratio estimation. 
A)  monetary-unit sampling. 
B)  mean-per-unit estimation. 
C)  difference estimation. 
D)  ratio estimation.

Question 4

The auditor must consider the possibility that the true population misstatement is greater than the amount of misstatement that is tolerable when the auditor is performing:

Accepted Answer

A)  statistical sampling. 
B)  non-statistical sampling. 
C)  both A and B 
D)  none of the above 
A)  statistical sampling. 
B)  non-statistical sampling. 
C)  both A and B 
D)  none of the above

Question 5

Whenever a statistical method is used, a decision rule determines whether the population is acceptable.The decision rule for monetary-unit sampling is 'Accept the conclusion that the book value is NOT misstated by a material amount if:

Accepted Answer

A)  the overstatement tolerable misstatement amount falls between the lower and upper misstatement bounds.' 
B)  the upper misstatement bound falls between the understatement and overstatement tolerable misstatement amounts.' 
C)  both the understatement and overstatement tolerable misstatement amounts fall between the upper and lower misstatement bounds.' 
D)  both the lower and upper misstatement bounds falls between the understatement and overstatement tolerable misstatement amounts.' 
A)  the overstatement tolerable misstatement amount falls between the lower and upper misstatement bounds.' 
B)  the upper misstatement bound falls between the understatement and overstatement tolerable misstatement amounts.' 
C)  both the understatement and overstatement tolerable misstatement amounts fall between the upper and lower misstatement bounds.' 
D)  both the lower and upper misstatement bounds falls between the understatement and overstatement tolerable misstatement amounts.'

Question 6

Difference estimation, ratio estimation, and mean-per-unit estimation are all techniques that constitute the general class of methods called:

Accepted Answer

A)  attributes sampling. 
B)  variables sampling. 
C)  block sampling. 
D)  monetary-unit sampling. 
A)  attributes sampling. 
B)  variables sampling. 
C)  block sampling. 
D)  monetary-unit sampling.

Question 7

Explain the steps involved in systematic sample selection.

Accepted Answer

In systematic sample selection, the audi

Question 8

The method used to measure the estimated total error amount in a population where there is both a recorded value and an audited value for each item in the sample is:

Accepted Answer

A)  mean-per-unit estimation. 
B)  ratio estimation. 
C)  monetary-unit sampling. 
D)  difference estimation. 
A)  mean-per-unit estimation. 
B)  ratio estimation. 
C)  monetary-unit sampling. 
D)  difference estimation.

Question 9

How can non-sampling risk be eliminated?

Accepted Answer

A)  proper supervision and instruction of the client's employees 
B)  controls which ensure that the sample drawn is random and representative 
C)  the use of attributes sampling rather than variables sampling 
D)  proper supervision and instruction of the audit team 
A)  proper supervision and instruction of the client's employees 
B)  controls which ensure that the sample drawn is random and representative 
C)  the use of attributes sampling rather than variables sampling 
D)  proper supervision and instruction of the audit team

Question 10

An auditor using non-statistical sampling cannot:

Accepted Answer

A)  determine a point estimate for the population. 
B)  mathematically measure the precision of the point estimate. 
C)  draw a random sample. 
D)  do any of the above. 
A)  determine a point estimate for the population. 
B)  mathematically measure the precision of the point estimate. 
C)  draw a random sample. 
D)  do any of the above.

Question 11

When a small preliminary sample is used to estimate the population deviation rate, the preliminary sample cannot be included in the ultimate sample.

Accepted Answer

A) True 
 B)False

Question 12

The risk which the auditor is willing to take in accepting a control as being effective when it is not is the:

Accepted Answer

A)  allowable risk of overreliance (ARO). 
B)  tolerable deviation rate (TDR). 
C)  estimated population deviation rate. 
D)  sample deviation rate (SDR). 
A)  allowable risk of overreliance (ARO). 
B)  tolerable deviation rate (TDR). 
C)  estimated population deviation rate. 
D)  sample deviation rate (SDR).

Question 13

Which one of the following material occurrences would be most likely to attract the auditor's attention?

Accepted Answer

A)  deviations from client's established control procedures 
B)  monetary errors or irregularities in populations of account balance details 
C)  deviations from client's budgeted values 
D)  both A and B 
A)  deviations from client's established control procedures 
B)  monetary errors or irregularities in populations of account balance details 
C)  deviations from client's budgeted values 
D)  both A and B

Question 14

Directed sample selection is the selection of each item in the sample based on some judgement criteria established by the auditor.Discuss three commonly-used criteria.

Accepted Answer

Commonly used criteria in directed sampl

Question 15

Describe each of the four types of sample selection methods commonly associated with statistical audit sampling.

Accepted Answer

Four types of sample selection methods c

Question 16

In systematic sample selection, the population size is divided by the number of sample items desired in order to determine the:

Accepted Answer

A)  interval. 
B)  mean. 
C)  computed upper exceptions rate. 
D)  tolerable exception rate. 
A)  interval. 
B)  mean. 
C)  computed upper exceptions rate. 
D)  tolerable exception rate.

Question 17

The most commonly used method of statistical sampling for tests of details of balances is:

Accepted Answer

A)  discovery sampling. 
B)  monetary-unit sampling. 
C)  variables sampling. 
D)  attributes sampling. 
A)  discovery sampling. 
B)  monetary-unit sampling. 
C)  variables sampling. 
D)  attributes sampling.

Question 18

If all other factors specified in a sampling plan remain constant, changing the estimated population deviation rate from 2% to 4% would cause the required sample size to:

Accepted Answer

A)  decrease. 
B)  remain the same. 
C)  increase. 
D)  become indeterminate. 
A)  decrease. 
B)  remain the same. 
C)  increase. 
D)  become indeterminate.

Question 19

Explain the effect on sample size of increasing each of the following: tolerable deviation rate, estimated population deviation rate, acceptable risk of assessing control risk too low, and population size.

Accepted Answer

The tolerable deviation rate (TDR)and ac

Question 20

A sample in which every possible combination of items in the population has an equal chance of constituting the sample is a:

Accepted Answer

A)  statistical sample. 
B)  random sample. 
C)  representative sample. 
D)  judgement sample. 
A)  statistical sample. 
B)  random sample. 
C)  representative sample. 
D)  judgement sample.

Discuss each of the six possible courses of action the auditor can take when he or she has concluded that the population is misstated by more than a tolerable amount.

The initial sample size is so-called because:

The variables sampling method which generally results in smaller sample sizes than any other method is:

The auditor must consider the possibility that the true population misstatement is greater than the amount of misstatement that is tolerable when the auditor is performing:

Whenever a statistical method is used, a decision rule determines whether the population is acceptable.The decision rule for monetary-unit sampling is 'Accept the conclusion that the book value is NOT misstated by a material amount if:

Difference estimation, ratio estimation, and mean-per-unit estimation are all techniques that constitute the general class of methods called:

Explain the steps involved in systematic sample selection.

The method used to measure the estimated total error amount in a population where there is both a recorded value and an audited value for each item in the sample is:

How can non-sampling risk be eliminated?

An auditor using non-statistical sampling cannot:

When a small preliminary sample is used to estimate the population deviation rate, the preliminary sample cannot be included in the ultimate sample.

The risk which the auditor is willing to take in accepting a control as being effective when it is not is the:

Which one of the following material occurrences would be most likely to attract the auditor's attention?

Directed sample selection is the selection of each item in the sample based on some judgement criteria established by the auditor.Discuss three commonly-used criteria.

Describe each of the four types of sample selection methods commonly associated with statistical audit sampling.

In systematic sample selection, the population size is divided by the number of sample items desired in order to determine the:

The most commonly used method of statistical sampling for tests of details of balances is:

If all other factors specified in a sampling plan remain constant, changing the estimated population deviation rate from 2% to 4% would cause the required sample size to:

Explain the effect on sample size of increasing each of the following: tolerable deviation rate, estimated population deviation rate, acceptable risk of assessing control risk too low, and population size.

A sample in which every possible combination of items in the population has an equal chance of constituting the sample is a:

Demand for audit and assurance services

Auditors’ legal environment

Audit quality and ethics

Audit responsibilities and objectives

Audit evidence

Audit planning and documentation

Materiality and risk

Internal control and control risk

Fraud auditing

The impact of information technology on the audit process

Overall audit plan and audit program

Audit of the sales and collection cycle: Tests of controls and substantive tests of transactions

Completing tests in the sales and collection cycle: Accounts receivable

Audit of transaction cycles and financial statement balances I

Audit of transaction cycles and financial statement balances II

Completing the audit

Audit reporting

Other auditing and assurance engagements

Filters

Exam 14: Audit sampling

Discuss each of the six possible courses of action the auditor can take when he or she has concluded that the population is misstated by more than a tolerable amount.

The initial sample size is so-called because:

The variables sampling method which generally results in smaller sample sizes than any other method is:

The auditor must consider the possibility that the true population misstatement is greater than the amount of misstatement that is tolerable when the auditor is performing:

Whenever a statistical method is used, a decision rule determines whether the population is acceptable.The decision rule for monetary-unit sampling is 'Accept the conclusion that the book value is NOT misstated by a material amount if:

Difference estimation, ratio estimation, and mean-per-unit estimation are all techniques that constitute the general class of methods called:

Explain the steps involved in systematic sample selection.

The method used to measure the estimated total error amount in a population where there is both a recorded value and an audited value for each item in the sample is:

How can non-sampling risk be eliminated?

An auditor using non-statistical sampling cannot:

When a small preliminary sample is used to estimate the population deviation rate, the preliminary sample cannot be included in the ultimate sample.

The risk which the auditor is willing to take in accepting a control as being effective when it is not is the:

Which one of the following material occurrences would be most likely to attract the auditor's attention?

Directed sample selection is the selection of each item in the sample based on some judgement criteria established by the auditor.Discuss three commonly-used criteria.

Describe each of the four types of sample selection methods commonly associated with statistical audit sampling.

In systematic sample selection, the population size is divided by the number of sample items desired in order to determine the:

The most commonly used method of statistical sampling for tests of details of balances is:

If all other factors specified in a sampling plan remain constant, changing the estimated population deviation rate from 2% to 4% would cause the required sample size to:

Explain the effect on sample size of increasing each of the following: tolerable deviation rate, estimated population deviation rate, acceptable risk of assessing control risk too low, and population size.

A sample in which every possible combination of items in the population has an equal chance of constituting the sample is a:

Demand for audit and assurance services

Auditors’ legal environment

Audit quality and ethics

Audit responsibilities and objectives

Audit evidence

Audit planning and documentation

Materiality and risk

Internal control and control risk

Fraud auditing

The impact of information technology on the audit process

Overall audit plan and audit program

Audit of the sales and collection cycle: Tests of controls and substantive tests of transactions

Completing tests in the sales and collection cycle: Accounts receivable

Audit of transaction cycles and financial statement balances I

Audit of transaction cycles and financial statement balances II

Completing the audit

Audit reporting

Other auditing and assurance engagements

Filters