Exam 9: Audit Sampling

The auditors have audited a sample with a standard deviation of audited values larger than they had originally estimated.In this situation,to maintain the risk of incorrect acceptance at its predetermined level without increasing the size of the sample,which of the following statements is correct?

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?

Use of the ratio estimation sampling technique to estimate dollar amounts is inappropriate when:

Increases in the number of deviations in an attributes sample results in an increase in the achieved upper deviation rate of the attributes sample.

In performing a test of a control last year the auditors specified a tolerable deviation rate of X percent.This year the auditors have specified a tolerable rate of less than X percent.Assuming that all other factors remain the same,which of the following is true regarding the relationship between this year's sample size compared to last year's sample size?

Which of the following statements is correct concerning the use of nonstatistical sampling for substantive tests?

To determine sample size in an attribute sampling application,what must be specified?

In variables estimation sampling,the sample standard deviation is used to calculate the

Which of the following statements is correct concerning statistical sampling in tests of controls?

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 $640,000.The projected misstatement based on this sample is:

Which of the following statements is correct about the sample size in statistical sampling when testing internal controls?

When using sampling for tests of controls,which of the following audit consequences may follow?

When evaluating the results of a variables sampling plan,the projected misstatement is calculated and compared to the tolerable misstatement.

When performing a test of a control over cash disbursements,a CPA may use a systematic sampling technique with a start at any randomly selected item.The biggest disadvantage of this type of sampling is that the items in the population:

An advantage of using statistical sampling techniques is that such techniques:

The 1000 accounts receivable of Winco Company have a total book value of $20,000 (Average book value = $20).Bob Duffo,CPA,has selected and audited a sample of 50 accounts with the following mean values: 1)Book value of $19. 2)Audited value of $19.60. What is the estimated total audited value using difference estimation sampling?

Which of the following best illustrates the concept of sampling risk?

The 2000 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 difference estimation technique,Rotter's estimate (to the nearest dollar)of year-end accounts receivable balance would be:

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

An increase in the tolerable misstatement has what effect on the planned allowance for sampling risk?