Exam 9: Audit Sampling

Using difference estimation,an auditor has taken a sample of 200 from a population's 40,000 items; that population has a book value of $200,000.She found that in her sample the average audited value was $4.20,while the average book value was $5.20.What is the estimated total audited value of the population?

What effect does obtaining a sample with a standard deviation larger than that estimated during planning have on the adjusted allowance for sampling risk?

Which of the following is generally not true about statistical sampling as compared to nonstatistical sampling?

Which of the following types of risk is of critical importance to auditors in performing tests of controls?

The definition of a "deviation" for a test of a control should include only those deviations that result in misstatements in the financial statements.

When using a statistical sampling plan,the auditors would probably require a smaller sample if the:

Teal Corporation has 2,000 accounts receivable,with a total book value of $200,000.Ricardo Ramaro,CPA,has selected and audited a sample of 100 of the accounts with a combined book value of $10,100; the total of their audited values was $11,000.Using the mean-per-unit method,calculate the: a.Accounts receivable estimated audited value. b.Projected misstatement.

Which of the following statistical selection techniques is least desirable for use by an auditor?

There are many kinds of statistical estimates that an auditor may find useful,but basically every statistical estimate in auditing is of either a quantity or of an error rate.The statistical terms that roughly correspond to "quantities" and "occurrence rate",respectively,are:

Which of the following may be used to reduce the risk of nonsampling errors?

Using ratio and difference estimation for a sample is an example of a dual purpose test.

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

Assume a mean-per-unit estimation variables sampling application with a tolerable misstatement of $70,000 and a book value of $700,000.After performing the sampling plan,the auditors calculated an adjusted allowance for sampling risk of $45,000 and a point estimate of the population's total audited value to be $650,000.Based on these results,the auditor would:

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

In the past,the auditors have found that the book value of a receivable account has been related to the amount the account is misstated (i.e.,large accounts have large misstatements and small accounts have small misstatements).Which of the following techniques is most likely to be efficient?

Stratification of the population generally results in a more efficient sampling plan.

A dual purpose test simultaneously.

Discovery sampling is equivalent to an attributes sampling plan with a specified expected deviation rate of 0 percent.

Changing from a sampling plan using random selection with replacement to random selection without replacement has what effect on the required sample size?

Statistical sampling cannot be used to test all control activities.