Question 1

Which one of the following statements is NOT correct?

Accepted Answer

A)   It is acceptable for auditors to use statistical sampling methods.
B)   The primary benefit of statistical sampling methods is the quantification of sampling risk.
C)   An advantage of using statistical sampling is that the cost/benefit ratio is always positive.
D)   It is acceptable for auditors to use non-statistical sampling methods.E) A) and B)
F) None of the above

Question 2

When the computed upper deviation rate is greater than the tolerable deviation rate, it is necessary for the auditor to take specific action.Which of the following courses of action would be most difficult to defend if the auditor is ever subject to review by a court?

Accepted Answer

A)   Write a letter to management.
B)   Expand the sample size.
C)   Revise the assessed control risk.
D)   Revise and relax the tolerable deviation rate (TDR)  or the acceptable risk of assessing control risk too low (ARO) .E) A) and D)
F) C) and D)

Question 3

Which of the following factors is generally NOT considered in determining sample size for a test of controls?

Accepted Answer

A)   risk of assessing control risk too low
B)   expected population deviation rate
C)   tolerable deviation rate
D)   population sizeE) A) and B)
F) None of the above

Question 4

There are seven steps to calculate adjusted misstatement bounds when both overstatement and understatement errors are discovered in monetary-unit sampling.Step one is 'Determine misstatement for each sample item, keeping overstatements and understatements separate.' Discuss each of the remaining six steps.

Accepted Answer

The remaining six steps are as follows:
...

Question 5

In monetary-unit sampling, the likelihood of high dollar items from the population being included in the sample is greater than the likelihood for small dollar items.

Accepted Answer

A) True 
 B)False

Question 6

Acceptable audit risk (AAR)and acceptable risk of incorrect acceptance (ARIA)are inversely related; that is, as AAR increases, ARIA decreases.

Accepted Answer

A) True 
 B)False

Exam 14: Audit sampling

Acceptable audit risk (AAR)and acceptable risk of incorrect acceptance (ARIA)are inversely related; that is, as AAR increases, ARIA decreases.

Correct Answer
verified

In monetary-unit sampling, the likelihood of high dollar items from the population being included in the sample is greater than the likelihood for small dollar items.

Correct Answer
verified

Which of the following factors is generally NOT considered in determining sample size for a test of controls?

Correct Answer
verified

Which one of the following statements is NOT correct?

Correct Answer
verified

Correct Answer
verified
The remaining six steps are as follows:
...
View Answer

When the computed upper deviation rate is greater than the tolerable deviation rate, it is necessary for the auditor to take specific action.Which of the following courses of action would be most difficult to defend if the auditor is ever subject to review by a court?

Correct Answer
verified

Exam 14: Audit sampling

Acceptable audit risk (AAR)and acceptable risk of incorrect acceptance (ARIA)are inversely related; that is, as AAR increases, ARIA decreases.

Correct AnswerverifiedShow Answer

In monetary-unit sampling, the likelihood of high dollar items from the population being included in the sample is greater than the likelihood for small dollar items.

Correct AnswerverifiedShow Answer

Which of the following factors is generally NOT considered in determining sample size for a test of controls?

Correct AnswerverifiedShow Answer

Which one of the following statements is NOT correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe remaining six steps are as follows:...View AnswerShow Answer

When the computed upper deviation rate is greater than the tolerable deviation rate, it is necessary for the auditor to take specific action.Which of the following courses of action would be most difficult to defend if the auditor is ever subject to review by a court?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The remaining six steps are as follows:
...
View Answer

Correct Answer
verified