Auditing and Assurance Services, Student Value Edition (16th Edition)
16th Edition
ISBN: 9780134075754
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
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Question
Chapter 15, Problem 35DQP
a.
To determine
Identify and complete the missing information for each attribute.
b.
To determine
Identify for the type of attributes for which samples are unacceptable.
c.
To determine
Provide the reason for attribute 1 to have a smaller sample size at the time of comparing them with attribute 3.
d.
To determine
Provide the reason for attribute 5 to have high CUER at the time of comparing them with attribute 2.
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Students have asked these similar questions
S1: Mean per unit estimation is a classical variable sampling technique that projects the sample average to the total population by multiplying the sample average by the number of items in the population. S2: The more the auditor is relying on other substantive procedures to reduce to an acceptable level the detection risk regarding a particular population, the less assurance the auditor will require from sampling, and the smaller the sample size can be.
a. BOTH STATEMENTS ARE TRUE
b. BOTH STATEMENTS ARE FALSE
c. ONLY S1 IS TRUE
d. ONLY S2 IS TRUE
Explain the following audit sample selection
1. Random selection
2. Systematic selection
3. Monetary unit sampling
4. Haphazard selection
5. Block selection
6. Attribute sampling
Which of the following statements about attribute sampling is correct?
A.
Larger transactions have a higher chance of being selected into the sample than smaller transactions.
B.
The risk of over-reliance does not affect the sample size.
C.
Attribute sampling is often used in the test of controls.
D.
The haphazard selection method is often used for attribute sampling.
E.
If the estimated population deviation rate is higher than the tolerable deviation rate, auditors conclude the internal control is effective.
Chapter 15 Solutions
Auditing and Assurance Services, Student Value Edition (16th Edition)
Ch. 15 - Prob. 1RQCh. 15 - Prob. 2RQCh. 15 - Prob. 3RQCh. 15 - Prob. 4RQCh. 15 - Prob. 5RQCh. 15 - Prob. 6RQCh. 15 - Prob. 7RQCh. 15 - Prob. 8RQCh. 15 - Prob. 9RQCh. 15 - Prob. 10RQ
Ch. 15 - Prob. 11RQCh. 15 - Prob. 12RQCh. 15 - Prob. 13RQCh. 15 - Distinguish between the TER and the CUER. How is...Ch. 15 - Prob. 15RQCh. 15 - Prob. 16RQCh. 15 - Prob. 17RQCh. 15 - Prob. 18RQCh. 15 - Prob. 19RQCh. 15 - Prob. 20RQCh. 15 - Prob. 21RQCh. 15 - Prob. 22.1MCQCh. 15 - Prob. 22.2MCQCh. 15 - Prob. 22.3MCQCh. 15 - Prob. 23.1MCQCh. 15 - Prob. 23.2MCQCh. 15 - Prob. 23.3MCQCh. 15 - Prob. 24.1MCQCh. 15 - Prob. 24.2MCQCh. 15 - Prob. 24.3MCQCh. 15 - Prob. 25.1MCQCh. 15 - Prob. 25.2MCQCh. 15 - Prob. 25.3MCQCh. 15 - Prob. 27DQPCh. 15 - Lenter Supply Company is a medium-sized...Ch. 15 - Prob. 29DQPCh. 15 - Prob. 30DQPCh. 15 - Prob. 31DQPCh. 15 - Prob. 32DQPCh. 15 - Prob. 33DQPCh. 15 - Prob. 34DQPCh. 15 - Prob. 35DQPCh. 15 - Prob. 36CCh. 15 - Prob. 37ICA
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- Which of the following combinations results in an increase in sample size in an attribute sample? a. Allowable Risk of Overreliance Tolerable Rate Expected Population Deviation Rate Decrease Decrease Increase b. Allowable Risk of Overreliance Tolerable Rate Expected Population Deviation Rate Decrease Increase Decrease c. Allowable Risk of Overreliance Tolerable Rate Expected Population Deviation Rate Increase Increase Decrease d. Allowable Risk of Overreliance Tolerable Rate Expected Population Deviation Rate Increase Increase Increase e. Allowable Risk of Overreliance Tolerable Rate Expected Population Deviation Rate Increase Decrease Increasearrow_forwardIn calculating the projected misstatement in monetary unit sampling, accounts with a book value larger than the sampling interval are extended to the projected misstatement at their: Misstatement amount. Actual book value. Tainting percentage times the sampling interval. Tainting percentage times their book value.arrow_forwardWhen using monetary unit sampling, a population is accepted as being materially correct when the: Tolerable misstatement is greater than the upper limit on misstatement. Incremental allowance is less than the upper limit on misstatement. Projected misstatement is less than the upper limit on misstatement. Basic precision is greater than the projected misstatement.arrow_forward
- When using sampling in the study of internal control, the audit team would compare theupper limit rate of deviation to thea. Expected population deviation rate.b. Sample rate of deviation.c. Statistical rate of deviation.d. Tolerable rate of deviationarrow_forwardSTATEMENT 1: If the sampling unit is defined as the individual disbursement entry in the check register, the sampling frame would be the check voucher and its supporting documents. A STATEMENT 2: Not all audit tests applied to less than 100% of the populatian are considered audit sampling applications. A. Only Statement 1 is incorrect B. Only Statement 1 is correct C. Both statements are incorrect D. Both statements are correctarrow_forwardThe risk that the decision made based on the sample will differ from the decision madebased on the entire population is referred to asa. Audit risk.b. Examination risk.c. Sampling risk.d. Nonsampling riskarrow_forward
- 1. Which of the following would be designed to estimate a numerical measurement of a population, such as monetary value?* A. Sampling for variables B. Sampling for attributes C. Sequential sampling D. Discovery sampling E. None of themarrow_forwardConsider a sample with data values of 10, 20, 12, 17, and 16. a. Compute the mean and median. b. Consider a sample with data values 10, 20, 12, 17, 16, and 12. How would you expect the mean and median for these sample data to compare to the mean and median for part a (higher, lower, or the same)? Compute the mean and median for the sample data 10, 20, 12, 17, 16, and 12.arrow_forward. STATEMENT 1: All auditing procedures involves audit sampling. STATEMENT 2: Sufficiency or adequacy of sample size is more "scientifically" measured with the use of statistical sampling approach. A. Only Statement 1 is incorrect B. Only Statement 1 is correct C. Both statements are incorrect D. Both statements are correctarrow_forward
- STATEMENT 1: The choice between a statistical and a nonstatistical sampling plan is based primarily on the auditor's assessment of the relative costs and benefits. STATEMENT 2: The choice between a statistical and a nonstatistical sampling plan is made independent of the selection of audit procedures. A. Only Statement 1 is incorrect B. Only Statement 1 is correct C. Both statements are incorrect D. Both statements are correctarrow_forwardMonetary Unit and Classical Variables Sampling. Indicate whether each of the following characteristics applies to monetary unit sampling (MUS), classical variables sampling (CVS),both MUS and CVS (both), or neither MUS nor CVS (neither).a. May be used in conjunction with substantive procedures.b. Tends to select higher dollar items for examination.c. Is more effective in identifying overstatements.d. Incorporates assessments of tolerable misstatement in determining sample size.e. Incorporates assessments of the population variability in determining sample size.f. Controls the audit team’s exposure to the risk of incorrect rejection and the risk of incorrect acceptance.g. Requires the audit team to project discovered misstatements to the population.h. Can expose the audit team to nonsampling risk.i. May be used in conjunction with the study and evaluation of internal control.j. Is more appropriate for use when a higher number of misstatements is anticipated.arrow_forwardSelect the necessary words from the list of possibilities to complete the following statements. 1. 2. 7. Inherent in the use of sampling is representative of the population. 9. When the auditors estimate sampling risk using professional judgment rather than by using the laws of probability, they are said to be using. sampling. an item from the population may be selected two or more times for inclusion in the When using sample. The term 3. 4. 5. In performing tests of controls, the auditors are primarily concerned with the risk of assessing 6. To use attributes sampling tables, the auditors must stipulate the desired risk of assessing control risk too low, the expected deviation rate in the population, and the desired Statements risk which is the possibility of selecting a sample that i not refers to the process of dividing a population into relatively homogeneous subgroups. sampling is usually used in situations in which the auditors expect a very low rate of occurrence of some…arrow_forward
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