Exam 9: Audit Sampling

The 4,000 accounts receivable of GHI Company have a total book value of $60,000.Bob Smith,CPA,has selected and audited a sample of 100 accounts with a total book value of $1,600.Using the mean-per-unit estimation technique,Smith has properly estimated a projected misstatement of a $8,000 overstatement for the entire population.The audited value of Smith's sample is:

If all other factors specified in an attributes sampling plan remain constant,decreasing the tolerable rate and increasing the estimated population deviation rate would have what effect on sample size?

Increases in the tolerable misstatement result in a decreased sample size when using mean-per-unit estimation.

Which of the following is an advantage of systematic selection over random number selection?

The tolerable deviation rate in sampling for tests of controls is:

The 2,000 accounts receivable of ABC Company have a total book value of $40,000.Bob Rotter,CPA,has selected and audited a sample of 100 accounts with a total book value of $1,950.The audited value of the 100 accounts in the sample is $1,875. -Using the mean-per-unit estimation technique,Rotter's estimate (to the nearest dollar)of year-end accounts receivable balance would be:

The auditors expect a population deviation rate of billing errors of two percent,and have established a tolerable rate of five percent.The sampling approach most likely to be used is:

The 4,000 accounts receivable of Miller Company have a total book value of $150,000.A CPA has selected and audited a sample of 100 accounts with a total book value of $3,700 and an audited value of $3,800. -Using the difference estimation technique,estimated total audited value of the population is:

Population - $\quad$ Size $= 10,000$ items - Book value $= \$ 8,000,000$ - Tolerable misstatement $= \$ 300,000$ Sample - $\quad$ Size $= 100$ items. - Average book value of sample items $= \$ 795$ - Allowance for sampling risk $= \$ 220,000$ - Projected misstatement $= \$ 100,000$ overstatement -The estimated total audited value of the population equals:

Auditors have a variety of sampling approaches available.For each approach in the first column,identify the correct statement in the second column.Each statement may be used once,more than once,or not at all. -Mean-per-unit estimation sampling.

The 4,000 accounts receivable of Miller Company have a total book value of $150,000.A CPA has selected and audited a sample of 100 accounts with a total book value of $3,700 and an audited value of $3,800. -Using difference estimation,an auditor has taken a sample of 150 from a population's 50,000 items;that population has a book value of $250,000.She found that in her sample the average audited value was $4.50,while the average book value was $5.20.What is the estimated total audited value of the population?

The 4,000 accounts receivable of Miller Company have a total book value of $150,000.A CPA has selected and audited a sample of 100 accounts with a total book value of $3,700 and an audited value of $3,800. -Using the ratio estimation technique,the estimated total audited value of the population is:

An important statistic to consider when using a statistical sampling audit plan is the population variability.The population variability is measured by the

Auditors have a variety of sampling approaches available.For each approach in the first column,identify the correct statement in the second column.Each statement may be used once,more than once,or not at all. -Difference estimation sampling.

During the final planning of the accounts receivable plan a CPA specified a tolerable misstatement of $30,000,instead of the $20,000 contained in the preliminary audit plan.What would be the impact of this change?

In assessing sampling risk,the risk of incorrect rejection and the risk of assessing control risk too high relate to the:

Which of the following factors does an auditor need to consider in planning a particular audit sample for a test of control?

A decrease in the tolerable misstatement has what effect on the required sample size?

If the projected misstatement in a nonstatistical sampling is $8,000,while the tolerable misstatement is $9,000,what would an auditor likely conclude?

If all other factors specified in an attributes sampling plan remain constant,decreasing the tolerable rate and decreasing the risk of assessing control risk too low would have what effect on sample size?