Question 1

Helen found that the expense reports were not properly approved while the senior accounts payable clerk was on vacation in July.Helen decided to perform a test of control on the authorization of expense reports for all the months except for July,which she will test substantively.Helen is allowed to do this because

Accepted Answer

A)  the authorized expense reports for July are not material.
B)  it would not be cost beneficial to test the entire population substantively.
C)  the authorizations for the month of July are not representative of the population as a whole.
D)  compensating controls exist in the payroll reconciliation process.

Question 2

If an auditor would like to estimate how many sales invoices have errors (such as no required order number showing or authorization for customers exceeding their credit limit) ,the auditor would likely use

Accepted Answer

A)  random sampling with replacement.
B)  sampling for attributes.
C)  sampling for variables.
D)  stratified random sampling.

Question 3

Nonsampling errors occur when audit tests do not uncover existing exceptions in the

Accepted Answer

A)  population.
B)  sample.
C)  planning stage.
D)  financial statements.

Question 4

In systematic selection,population size is divided by the number of sample items desired in order to determine the

Accepted Answer

A)  interval.
B)  tolerable exception rate.
C)  computed upper exception rate.
D)  mean.

Question 5

Auditors consider statistical sampling to be characterized by

Accepted Answer

A)  representative sample selection and statistical calculation of the results.
B)  representative sample selection and nonmathematical consideration of the results.
C)  carefully biased sample selection and statistical calculation of the results.
D)  carefully biased sample selection and nonmathematical consideration of the results.

Question 6

An advantage of using statistical over nonstatistical sampling methods in tests of controls is that the statistical methods

Accepted Answer

A)  afford greater assurance and clarity than a nonstatistical sample of equal size.
B)  provide an objective basis for quantitatively evaluating sample risks.
C)  can more easily convert the sample into a dual-purpose test useful for substantive testing.
D)  eliminate the need to use judgment in determining appropriate sample sizes.

Question 7

An auditor who uses statistical sampling for attributes in testing internal controls should increase the assessed level of control risk when the

Accepted Answer

A)  sample rate of exceptions is less than the expected rate of exception used in planning the sample.
B)  tolerable exception rate less the allowance for sampling risk exceeds the sample rate of deviation.
C)  sample rate of exceptions plus the allowance for sampling risk exceeds the tolerable exception rate.
D)  sample rate of exceptions plus the allowance for sampling risk equals the tolerable exception rate.

Question 8

The overall objectives of the audit test must be stated in terms of the

Accepted Answer

A)  anticipated results.
B)  transaction cycle being tested.
C)  risks addressed and the transaction cycle being tested.
D)  risk addressed and the anticipated results.

Question 9

You have just been given the approval to conduct statistical sampling for the audit of capital assets acquisitions.Previously,this work was completed using a judgmental sample.
Required:
Explain the key areas where decisions need to be made when conducting audit work using a statistical sample.

Accepted Answer

Decisions are made or professional judgm...

Question 10

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.

Question 11

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.

Question 12

An underlying feature of the random-based selection of items is that each

Accepted Answer

A)  stratum of the population is given equal representation in the sample.
B)  each item in the population must be randomly ordered.
C)  each item in the population should have an equal opportunity to be selected.
D)  each item must be systematically selected using replacement.

Question 13

Sampling risk (sampling error) is an inherent part of sampling that results from

Accepted Answer

A)  inappropriate audit procedures.
B)  failure to recognize exceptions.
C)  testing less than the entire population.
D)  weaknesses in the client's internal control system.

Question 14

A statistical method used to estimate the proportion of items in a population containing a characteristic of interest is

Accepted Answer

A)  population-proportional-to-size sampling.
B)  attribute sampling.
C)  variables sampling.
D)  estimation sampling.

Question 15

When an auditor selects a sample from a population,the objective is to obtain a sample that is

Accepted Answer

A)  representative.
B)  random.
C)  free from nonsampling risk.
D)  precise.

Question 16

Kyle is performing a test of detail using a nonstatistical 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 sa...

Question 17

The exception rate the auditor will permit in the population and still be willing to use the assessed level of control risk is called the

Accepted Answer

A)  tolerable exception rate.
B)  estimated population exception rate.
C)  acceptable risk of overreliance.
D)  sample exception rate.

Question 18

In monetary unit sampling,the values of the estimated likely maximum misstatements are referred to as the

Accepted Answer

A)  point estimates.
B)  precision intervals.
C)  confidence intervals.
D)  misstatement bounds.

Exam 11: Audit Sampling Concepts

The exception rate the auditor will permit in the population and still be willing to use the assessed level of control risk is called the

Correct Answer
verified

Auditors consider statistical sampling to be characterized by

Correct Answer
verified

A statistical method used to estimate the proportion of items in a population containing a characteristic of interest is

Correct Answer
verified

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

Correct Answer
verified

In systematic selection,population size is divided by the number of sample items desired in order to determine the

Correct Answer
verified

Nonsampling errors occur when audit tests do not uncover existing exceptions in the

Correct Answer
verified

An advantage of using statistical over nonstatistical sampling methods in tests of controls is that the statistical methods

Correct Answer
verified

An auditor who uses statistical sampling for attributes in testing internal controls should increase the assessed level of control risk when the

Correct Answer
verified

Correct Answer
verified

Sampling risk (sampling error) is an inherent part of sampling that results from

Correct Answer
verified

When an auditor selects a sample from a population,the objective is to obtain a sample that is

Correct Answer
verified

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

Correct Answer
verified
A)No,Kyle cannot formally measure the sa...
View Answer

In monetary unit sampling,the values of the estimated likely maximum misstatements are referred to as the

Correct Answer
verified

An underlying feature of the random-based selection of items is that each

Correct Answer
verified

If an auditor would like to estimate how many sales invoices have errors (such as no required order number showing or authorization for customers exceeding their credit limit) ,the auditor would likely use

Correct Answer
verified

You have just been given the approval to conduct statistical sampling for the audit of capital assets acquisitions.Previously,this work was completed using a judgmental sample. Required: Explain the key areas where decisions need to be made when conducting audit work using a statistical sample.

Correct Answer
verified
Decisions are made or professional judgm...
View Answer

The overall objectives of the audit test must be stated in terms of the

Correct Answer
verified

The sample exception rate equals the number of

Correct Answer
verified

Exam 11: Audit Sampling Concepts

The exception rate the auditor will permit in the population and still be willing to use the assessed level of control risk is called the

Correct AnswerverifiedShow Answer

Auditors consider statistical sampling to be characterized by

Correct AnswerverifiedShow Answer

A statistical method used to estimate the proportion of items in a population containing a characteristic of interest is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In systematic selection,population size is divided by the number of sample items desired in order to determine the

Correct AnswerverifiedShow Answer

Nonsampling errors occur when audit tests do not uncover existing exceptions in the

Correct AnswerverifiedShow Answer

An advantage of using statistical over nonstatistical sampling methods in tests of controls is that the statistical methods

Correct AnswerverifiedShow Answer

An auditor who uses statistical sampling for attributes in testing internal controls should increase the assessed level of control risk when the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Sampling risk (sampling error) is an inherent part of sampling that results from

Correct AnswerverifiedShow Answer

When an auditor selects a sample from a population,the objective is to obtain a sample that is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedA)No,Kyle cannot formally measure the sa...View AnswerShow Answer

In monetary unit sampling,the values of the estimated likely maximum misstatements are referred to as the

Correct AnswerverifiedShow Answer

An underlying feature of the random-based selection of items is that each

Correct AnswerverifiedShow Answer

If an auditor would like to estimate how many sales invoices have errors (such as no required order number showing or authorization for customers exceeding their credit limit) ,the auditor would likely use

Correct AnswerverifiedShow Answer

You have just been given the approval to conduct statistical sampling for the audit of capital assets acquisitions.Previously,this work was completed using a judgmental sample. Required: Explain the key areas where decisions need to be made when conducting audit work using a statistical sample.

Correct AnswerverifiedDecisions are made or professional judgm...View AnswerShow Answer

The overall objectives of the audit test must be stated in terms of the

Correct AnswerverifiedShow Answer

The sample exception rate equals the number of

Correct AnswerverifiedShow Answer

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A)No,Kyle cannot formally measure the sa...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified
Decisions are made or professional judgm...
View Answer

Correct Answer
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Correct Answer
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