Exam 9: Audit Sampling: An Application to Substantive Tests of Account Balances

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After a sample is drawn randomly,the allowance for sampling risk must be statistically quantified within a specified level of confidence.

(True/False)

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Question 21

Expected misstatement is directly related to sample size.

(True/False)

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Question 22

Confidence level is inversely related to sample size.

(True/False)

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Question 23

In nonstatistical sampling,describe the two methods auditors use to project sample results to the population.How does an auditor determine which method to use?

(Essay)

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Question 24

Monetary-unit sampling should not be used if

(Multiple Choice)

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Question 25

The purpose of audit sampling is to draw inferences about the entire population from the results of a sample.

(True/False)

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Question 26

Describe two advantages and two disadvantages of monetary-unit sampling (MUS).

(Essay)

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Question 27

For monetary-unit sampling,a sampling interval of 400 means that

(Multiple Choice)

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Question 28

Which one of the following statements is true regarding two random samples,drawn in the same way,from the same population,one of size 30 and one of size 300?

(Multiple Choice)

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Question 29

An auditor has taken a large sample from an audit population that is skewed in the sense that it contains a large number of small dollar balances.The auditor can conclude

(Multiple Choice)

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Question 30

What is the primary objective of testing all individually significant items rather than sample testing?

(Multiple Choice)

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Question 31

When auditing accounts payable using classical variables sampling,Sue finds evidence indicating that the account may be materially misstated.What are Sue's options?

(Essay)

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Question 32

Which of the following sample planning factors would influence the sample size for a substantive test of details for a specific account?

(Multiple Choice)

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Question 33

An accounts receivable account balance is $500,000 and the auditor determines a sample size of 30 would provide adequate assurance.The auditor plans to use a monetary-unit sampling plan with systematic sample selection.The auditor notices that there are six customer accounts of at least $15,000 and would like the systematic selection technique to select all items that are at least $15,000,even if that means the sample size is slightly larger than 30.To achieve the auditor's objectives,the sampling interval should be

(Multiple Choice)

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Question 34

A number of factors influence the sample size for a substantive test of details of an account balance.All other factors being equal,which of the following would lead to a larger sample size?

(Multiple Choice)

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Question 35

You have been placed in charge of determining the sample size for an audit of accounts receivable.Your superior would like a confidence level of 99%.How does this affect your determination of sample size? What can you infer about the level of risk of incorrect acceptance that your superior is willing to accept?

(Essay)

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Question 36

The size of the upper limit on misstatement is largely dependent on the sample size,which is inversely related to the desired confidence level.

(True/False)

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Question 37

In a monetary-unit sampling plan,the upper misstatement limit is $11,200 and the risk of incorrect acceptance is 5%.This means that

(Multiple Choice)

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Question 38

In statistical or nonstatistical sampling methods used in substantive testing,an auditor most likely would stratify a population into meaningful groups if

(Multiple Choice)

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Question 39

Precision is a statistical measure of the maximum projected difference between the sample estimate and the true but unknown population total and is directly related to

(Multiple Choice)

4.7/5

(77)

Question 40

Showing 21 - 40 of 53

After a sample is drawn randomly,the allowance for sampling risk must be statistically quantified within a specified level of confidence.

Expected misstatement is directly related to sample size.

Confidence level is inversely related to sample size.

In nonstatistical sampling,describe the two methods auditors use to project sample results to the population.How does an auditor determine which method to use?

Monetary-unit sampling should not be used if

The purpose of audit sampling is to draw inferences about the entire population from the results of a sample.

Describe two advantages and two disadvantages of monetary-unit sampling (MUS).

For monetary-unit sampling,a sampling interval of 400 means that

Which one of the following statements is true regarding two random samples,drawn in the same way,from the same population,one of size 30 and one of size 300?

An auditor has taken a large sample from an audit population that is skewed in the sense that it contains a large number of small dollar balances.The auditor can conclude

What is the primary objective of testing all individually significant items rather than sample testing?

When auditing accounts payable using classical variables sampling,Sue finds evidence indicating that the account may be materially misstated.What are Sue's options?

Which of the following sample planning factors would influence the sample size for a substantive test of details for a specific account?

A number of factors influence the sample size for a substantive test of details of an account balance.All other factors being equal,which of the following would lead to a larger sample size?

The size of the upper limit on misstatement is largely dependent on the sample size,which is inversely related to the desired confidence level.

In a monetary-unit sampling plan,the upper misstatement limit is $11,200 and the risk of incorrect acceptance is 5%.This means that

In statistical or nonstatistical sampling methods used in substantive testing,an auditor most likely would stratify a population into meaningful groups if

Precision is a statistical measure of the maximum projected difference between the sample estimate and the true but unknown population total and is directly related to

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning, Types of Audit Tests, and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Auditing the Inventory Management Process

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting Process: Long-Term Liabilities, Stockholders Equity, and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Professsional Conduct,Independence,and Quality Control

Legal Liability

Assurance,Attestation,amd Internal Auditing Services-professional Judgement Module

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