Question 1

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 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:

Accepted Answer

A)  Conclude that the population does not contain a material misstatement,because the tolerable misstatement exceeds the allowance for sampling risk.
B)  Conclude that the population does not contain a material misstatement,because the total audit value plus or minus tolerable misstatement includes the book value.
C)  Conclude that there is too great a risk that the account balance is materially misstated,because the tolerable misstatement exceeds to the projected misstatement.
D)  Conclude that there is too great a risk that the account balance is materially misstated,because one limit of the interval calculated by projected misstatement + or - allowance for sampling risk exceeds the tolerable misstatement.E) None of the above
F) A) and D)

Question 2

Population
-  \quad  Size  =10,000= 10,000=10,000  items
- Book value  =$8,000,000= \$ 8,000,000=$8,000,000 
- Tolerable misstatement  =$300,000= \$ 300,000=$300,000 
Sample
-  \quad  Size  =100= 100=100  items.
- Average book value of sample items  =$795= \$ 795=$795 
- Allowance for sampling risk  =$220,000= \$ 220,000=$220,000 
- Projected misstatement  =$100,000= \$ 100,000=$100,000  overstatement
-The "high" end of the confidence interval around the projected misstatement is equal to an overstatement of:

Accepted Answer

A)  $120,000.
B)  $300,000.
C)  $320,000.
D)  $620,000. E) A) and C)
F) A) and B)

Question 3

Which of the following statistical sampling techniques involves taking samples in a series of stages?

Accepted Answer

A)  Systematic sampling.
B)  Sequential sampling.
C)  Continuous sampling.
D)  Multiple location sampling.E) A) and B)
F) All of the above

Question 4

The auditors' failure to recognize a misstatement in an amount or a deviation in an internal control data processing procedure is described as a:

Accepted Answer

A)  Statistical error.
B)  Sampling misstatement.
C)  Standard error of the mean.
D)  Nonsampling error.E) None of the above
F) A) and B)

Question 5

Population
-  \quad  Size  =10,000= 10,000=10,000  items
- Book value  =$8,000,000= \$ 8,000,000=$8,000,000 
- Tolerable misstatement  =$300,000= \$ 300,000=$300,000 
Sample
-  \quad  Size  =100= 100=100  items.
- Average book value of sample items  =$795= \$ 795=$795 
- Allowance for sampling risk  =$220,000= \$ 220,000=$220,000 
- Projected misstatement  =$100,000= \$ 100,000=$100,000  overstatement
-The average audited value in the sample is equal to:

Accepted Answer

A)  $785.
B)  $805.
C)  $1,000.
D)  $1,200. E) A) and B)
F) A) and C)

Question 6

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

Accepted Answer

A)  Increasing the size of audit samples.
B)  Stratifying audit samples.
C)  Adequately planning audit samples.
D)  Using statistical sampling techniques.E) None of the above
F) A) and B)

Question 7

Statistical sampling generally may be applied to test internal control when the client's internal control procedures:

Accepted Answer

A)  Depend primarily on appropriate segregation of duties.
B)  Are carefully reduced to writing and are included in client accounting manuals.
C)  Leave an audit trail in the form of evidence of compliance.
D)  Enable the detection of material fraud in the accounting records.E) All of the above
F) C) and D)

Question 8

The 4,000 accounts receivable of Miller Company have a total book value of $150,000.A CPA has selected and audited a sample of 100 accounts with a total book value of $3,700 and an audited value of $3,800.
-Using the mean-per-unit estimation method an auditor has properly calculated the estimated total audited value of a population as $200,000.Her sample included 200 of the population's 40,000 items.She found that,in her sample the average audited value was $1 less than the average book value.What was the average audited value in the sample?

Accepted Answer

A)  $4.
B)  $5.
C)  $6.
D)  $10.E) All of the above
F) C) and D)

Question 9

Population
-  \quad  Size  =10,000= 10,000=10,000  items
- Book value  =$8,000,000= \$ 8,000,000=$8,000,000 
- Tolerable misstatement  =$300,000= \$ 300,000=$300,000 
Sample
-  \quad  Size  =100= 100=100  items.
- Average book value of sample items  =$795= \$ 795=$795 
- Allowance for sampling risk  =$220,000= \$ 220,000=$220,000 
- Projected misstatement  =$100,000= \$ 100,000=$100,000  overstatement
-The most likely amount of the misstatement is equal to:

Accepted Answer

A)  $100,000.
B)  $220,000.
C)  $300,000.
D)  $320,000. E) A) and D)
F) A) and C)

Question 10

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

Accepted Answer

A)  Point estimate of central tendency.
B)  Tainting of the sample interval.
C)  Risk of incorrect acceptance.
D)  Allowance for sampling risk.E) None of the above
F) All of the above

Question 11

The auditor using nonstatistical attributes sampling,but who nevertheless has chosen the sample in conformity with random selection procedures:

Accepted Answer

A)  Need not consider the risk of assessing control risk too low.
B)  Has committed a nonsampling error.
C)  Will have to use discovery sampling techniques to evaluate the results.
D)  Should compare the deviation rate of the sample to the tolerable rate.E) A) and C)
F) All of the above

Exam 9: Audit Sampling

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

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

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Which of the following statistical sampling techniques involves taking samples in a series of stages?

Correct Answer
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Correct Answer
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Statistical sampling generally may be applied to test internal control when the client's internal control procedures:

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The auditor using nonstatistical attributes sampling,but who nevertheless has chosen the sample in conformity with random selection procedures:

Correct Answer
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The auditors' failure to recognize a misstatement in an amount or a deviation in an internal control data processing procedure is described as a:

Correct Answer
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Correct Answer
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Exam 9: Audit Sampling

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

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

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Which of the following statistical sampling techniques involves taking samples in a series of stages?

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Statistical sampling generally may be applied to test internal control when the client's internal control procedures:

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The auditor using nonstatistical attributes sampling,but who nevertheless has chosen the sample in conformity with random selection procedures:

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The auditors' failure to recognize a misstatement in an amount or a deviation in an internal control data processing procedure is described as a:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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