Question 1

Which of the following best describes what the auditor means by the exception rate in the attribute sampling plan? The

Accepted Answer

A)  number of errors that can reasonably be expected to be found in a population. 
B)  frequency with which a certain characteristic occurs within a population. 
C)  degree of confidence that the sample is representative of the population. 
D)  dollar range within which the true population total can be expected to fall. 
A)  number of errors that can reasonably be expected to be found in a population. 
B)  frequency with which a certain characteristic occurs within a population. 
C)  degree of confidence that the sample is representative of the population. 
D)  dollar range within which the true population total can be expected to fall.

Question 2

After the auditor has completed all the procedures, it is important that the auditor document the work performed and review the evidence to assess the conclusion reached. This is a highly subjective process that relies heavily on

Accepted Answer

A)  the auditor's professional judgment. 
B)  the generally accepted accounting principles. 
C)  the generally accepted auditing standards. 
D)  the Rules of Professional Conduct. 
A)  the auditor's professional judgment. 
B)  the generally accepted accounting principles. 
C)  the generally accepted auditing standards. 
D)  the Rules of Professional Conduct.

Question 3

An auditor used sampling that has the statistical simplicity of attribute sampling yet provides a statistical result expressed in dollars. The auditor is using what type of sampling?

Accepted Answer

A)  attribute sampling 
B)  discovery sampling 
C)  monetary unit sampling 
D)  variable estimation sampling 
A)  attribute sampling 
B)  discovery sampling 
C)  monetary unit sampling 
D)  variable estimation sampling

Question 4

The acceptable risk of incorrect acceptance (ARIA) has a significant effect on sample size. The relationship of ARIA to sample size is

Accepted Answer

A)  direct (larger ARIA = larger sample). 
B)  inverse (larger ARIA = smaller sample). 
C)  variable (sometimes larger, sometimes smaller). 
D)  not determinable. 
A)  direct (larger ARIA = larger sample). 
B)  inverse (larger ARIA = smaller sample). 
C)  variable (sometimes larger, sometimes smaller). 
D)  not determinable.

Question 5

The sample exception rate equals the number of

Accepted Answer

A)  exceptions in the population divided by the sample size. 
B)  items in the population multiplied by the number of exceptions in the sample. 
C)  exceptions in the sample divided by the sample size. 
D)  exceptions in the population divided by the population size. 
A)  exceptions in the population divided by the sample size. 
B)  items in the population multiplied by the number of exceptions in the sample. 
C)  exceptions in the sample divided by the sample size. 
D)  exceptions in the population divided by the population size.

Question 6

A) Describe three types of sample selection methods commonly associated with statistical audit sampling.
B) Explain the difference between sampling with replacement and without replacement. Which method is more common in audit practice?
C) Describe the steps involved in systematic sampling.

Accepted Answer

A)Three types of sample selection method

Question 7

A public accountant examining inventory may appropriately apply sampling for attributes in order to estimate the

Accepted Answer

A)  average price of inventory items. 
B)  percentage of slow-moving inventory items. 
C)  dollar value of inventory. 
D)  physical quantity of inventory items. 
A)  average price of inventory items. 
B)  percentage of slow-moving inventory items. 
C)  dollar value of inventory. 
D)  physical quantity of inventory items.

Question 8

One of the ways to reduce sampling risk is to

Accepted Answer

A)  use an appropriate method of selecting sample items from the population. 
B)  carefully design the audit procedures to be used. 
C)  provide proper supervision and instruction of the audit team. 
D)  use variables sampling rather than attribute sampling. 
A)  use an appropriate method of selecting sample items from the population. 
B)  carefully design the audit procedures to be used. 
C)  provide proper supervision and instruction of the audit team. 
D)  use variables sampling rather than attribute sampling.

Question 9

A sample in which the characteristics of the sample are the same as those of the population is a(n)

Accepted Answer

A)  random sample. 
B)  variables sample. 
C)  attribute sample. 
D)  representative sample. 
A)  random sample. 
B)  variables sample. 
C)  attribute sample. 
D)  representative sample.

Question 10

Kyle is performing a test of detail using a non-statistical sample.
A) Can Kyle formally measure sampling error?
B) What should Kyle consider in determining the sampling error?

Accepted Answer

A)No, Kyle cannot formally measure the s

Question 11

A method of sampling in which all the items in the population are divided into two or more subpopulations is

Accepted Answer

A)  variables sampling. 
B)  attribute sampling. 
C)  stratified sampling. 
D)  divisible sampling. 
A)  variables sampling. 
B)  attribute sampling. 
C)  stratified sampling. 
D)  divisible sampling.

Question 12

An example of judgmental sampling is

Accepted Answer

A)  block sampling. 
B)  simple random sample selection. 
C)  systematic sample selection. 
D)  proportionate-to-size sample selection. 
A)  block sampling. 
B)  simple random sample selection. 
C)  systematic sample selection. 
D)  proportionate-to-size sample selection.

Question 13

Attribute sampling would be an appropriate method to use on which one of the following procedures in an audit program?

Accepted Answer

A)  Review sales transactions for large and unreasonable amounts. 
B)  Observe whether the duties of the accounts receivable clerk are separate from handling cash. 
C)  Examine a sample of duplicate sales invoices for credit approval by the credit manager. 
D)  Review the aged schedule of accounts receivable to determine if amounts receivable from officers are included. 
A)  Review sales transactions for large and unreasonable amounts. 
B)  Observe whether the duties of the accounts receivable clerk are separate from handling cash. 
C)  Examine a sample of duplicate sales invoices for credit approval by the credit manager. 
D)  Review the aged schedule of accounts receivable to determine if amounts receivable from officers are included.

Question 14

A common use of block testing is testing

Accepted Answer

A)  cutoff. 
B)  existence. 
C)  authorization. 
D)  valuation. 
A)  cutoff. 
B)  existence. 
C)  authorization. 
D)  valuation.

Question 15

When the auditor goes through a population and selects items for the sample without regard to their size, source, or other distinguishing characteristics, it is called

Accepted Answer

A)  block selection. 
B)  haphazard selection. 
C)  systematic selection. 
D)  statistical selection. 
A)  block selection. 
B)  haphazard selection. 
C)  systematic selection. 
D)  statistical selection.

Question 16

The occurrence rate or exception rate for attribute sampling is defined as the

Accepted Answer

A)  exception rate that the auditor will permit in the population and still be willing to use the assessed control risk. 
B)  risk that the auditor is willing to take of accepting a balance as correct when the true misstatement in the balance is greater than materiality. 
C)  exception rate that the auditor expects to find in the population before testing begins. 
D)  ratio of the items containing a specific attribute to the total number of population items. 
A)  exception rate that the auditor will permit in the population and still be willing to use the assessed control risk. 
B)  risk that the auditor is willing to take of accepting a balance as correct when the true misstatement in the balance is greater than materiality. 
C)  exception rate that the auditor expects to find in the population before testing begins. 
D)  ratio of the items containing a specific attribute to the total number of population items.

Question 17

There are 14 steps to audit sampling, divided into four sections: plan the sample, select the sample, perform the audit procedures, and evaluate the results. Discuss each of the steps that comprise the "plan the sample" section for attribute sampling.

Accepted Answer

The steps that comprise the "plan the sa

Question 18

As part of the audit of sales, the auditor has used attribute sampling to select a sample of sales invoices. The auditor has examined the duplicate sales invoice to determine whether it was approved for credit. Which of the following would be termed the "exception?" The

Accepted Answer

A)  sales invoice number. 
B)  approval initials. 
C)  name of the person who approves credit. 
D)  absence of an authorization. 
A)  sales invoice number. 
B)  approval initials. 
C)  name of the person who approves credit. 
D)  absence of an authorization.

Question 19

As part of the audit program for the audit of sales, the auditor will "review sales transactions for large and unusual amounts." Which of the following types of sampling would be suitable for this audit procedure?

Accepted Answer

A)  systematic 
B)  attribute 
C)  block 
D)  directed 
A)  systematic 
B)  attribute 
C)  block 
D)  directed

Question 20

When statistical sampling is used, the sample selected must be a probabilistic one. In addition, the auditor should

Accepted Answer

A)  use the haphazard selection method to make sure that the sample is properly selected. 
B)  use appropriate statistical evaluation methods of non-sampling risk computations. 
C)  request the client to review the sample and approve all items that are selected. 
D)  use appropriate statistical evaluation methods of sampling risk computations. 
A)  use the haphazard selection method to make sure that the sample is properly selected. 
B)  use appropriate statistical evaluation methods of non-sampling risk computations. 
C)  request the client to review the sample and approve all items that are selected. 
D)  use appropriate statistical evaluation methods of sampling risk computations.

Which of the following best describes what the auditor means by the exception rate in the attribute sampling plan? The

After the auditor has completed all the procedures, it is important that the auditor document the work performed and review the evidence to assess the conclusion reached. This is a highly subjective process that relies heavily on

An auditor used sampling that has the statistical simplicity of attribute sampling yet provides a statistical result expressed in dollars. The auditor is using what type of sampling?

The acceptable risk of incorrect acceptance (ARIA) has a significant effect on sample size. The relationship of ARIA to sample size is

The sample exception rate equals the number of

A) Describe three types of sample selection methods commonly associated with statistical audit sampling. B) Explain the difference between sampling with replacement and without replacement. Which method is more common in audit practice? C) Describe the steps involved in systematic sampling.

A public accountant examining inventory may appropriately apply sampling for attributes in order to estimate the

One of the ways to reduce sampling risk is to

A sample in which the characteristics of the sample are the same as those of the population is a(n)

Kyle is performing a test of detail using a non-statistical sample. A) Can Kyle formally measure sampling error? B) What should Kyle consider in determining the sampling error?

A method of sampling in which all the items in the population are divided into two or more subpopulations is

An example of judgmental sampling is

Attribute sampling would be an appropriate method to use on which one of the following procedures in an audit program?

A common use of block testing is testing

When the auditor goes through a population and selects items for the sample without regard to their size, source, or other distinguishing characteristics, it is called

The occurrence rate or exception rate for attribute sampling is defined as the

There are 14 steps to audit sampling, divided into four sections: plan the sample, select the sample, perform the audit procedures, and evaluate the results. Discuss each of the steps that comprise the "plan the sample" section for attribute sampling.

As part of the audit of sales, the auditor has used attribute sampling to select a sample of sales invoices. The auditor has examined the duplicate sales invoice to determine whether it was approved for credit. Which of the following would be termed the "exception?" The

As part of the audit program for the audit of sales, the auditor will "review sales transactions for large and unusual amounts." Which of the following types of sampling would be suitable for this audit procedure?

When statistical sampling is used, the sample selected must be a probabilistic one. In addition, the auditor should

The Demand for Audit and Other Assurance Services

The Public Accounting Profession and Audit Quality

Legal Liability

Professional Judgment and Ethics

Audit Responsibilities and Objectives

Client Acceptance and Planning the Audit

Materiality and Risk

Internal Controls and Control Risk

Audit Evidence

Audit Strategy and Audit Program

Audit of the Revenue Cycle

Audit of the Acquisition and Payment Cycle

Audit of the Inventory and Distribution Cycle

Audit of the Human Resources and Payroll Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Audit Reports on Financial Statements

Other Assurance and Nonassurance Services

Filters

Exam 11: Audit Sampling Concepts

Which of the following best describes what the auditor means by the exception rate in the attribute sampling plan? The

After the auditor has completed all the procedures, it is important that the auditor document the work performed and review the evidence to assess the conclusion reached. This is a highly subjective process that relies heavily on

An auditor used sampling that has the statistical simplicity of attribute sampling yet provides a statistical result expressed in dollars. The auditor is using what type of sampling?

The acceptable risk of incorrect acceptance (ARIA) has a significant effect on sample size. The relationship of ARIA to sample size is

The sample exception rate equals the number of

A) Describe three types of sample selection methods commonly associated with statistical audit sampling. B) Explain the difference between sampling with replacement and without replacement. Which method is more common in audit practice? C) Describe the steps involved in systematic sampling.

A public accountant examining inventory may appropriately apply sampling for attributes in order to estimate the

One of the ways to reduce sampling risk is to

A sample in which the characteristics of the sample are the same as those of the population is a(n)

Kyle is performing a test of detail using a non-statistical sample. A) Can Kyle formally measure sampling error? B) What should Kyle consider in determining the sampling error?

A method of sampling in which all the items in the population are divided into two or more subpopulations is

An example of judgmental sampling is

Attribute sampling would be an appropriate method to use on which one of the following procedures in an audit program?

A common use of block testing is testing

When the auditor goes through a population and selects items for the sample without regard to their size, source, or other distinguishing characteristics, it is called

The occurrence rate or exception rate for attribute sampling is defined as the

There are 14 steps to audit sampling, divided into four sections: plan the sample, select the sample, perform the audit procedures, and evaluate the results. Discuss each of the steps that comprise the "plan the sample" section for attribute sampling.

As part of the audit of sales, the auditor has used attribute sampling to select a sample of sales invoices. The auditor has examined the duplicate sales invoice to determine whether it was approved for credit. Which of the following would be termed the "exception?" The

As part of the audit program for the audit of sales, the auditor will "review sales transactions for large and unusual amounts." Which of the following types of sampling would be suitable for this audit procedure?

When statistical sampling is used, the sample selected must be a probabilistic one. In addition, the auditor should

The Demand for Audit and Other Assurance Services

The Public Accounting Profession and Audit Quality

Legal Liability

Professional Judgment and Ethics

Audit Responsibilities and Objectives

Client Acceptance and Planning the Audit

Materiality and Risk

Internal Controls and Control Risk

Audit Evidence

Audit Strategy and Audit Program

Audit of the Revenue Cycle

Audit of the Acquisition and Payment Cycle

Audit of the Inventory and Distribution Cycle

Audit of the Human Resources and Payroll Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Audit Reports on Financial Statements

Other Assurance and Nonassurance Services

Filters