DATA ANALY ACCT + CONNECT LL
1st Edition
ISBN: 9781266167867
Author: RICHARDSON
Publisher: MCG/CREATE
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Chapter 6, Problem 4MCQ
To determine
Identify the item which is not included in the determinants for
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The 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 risk
Which of the following best describes the method of determining the ULRD?a. Expected population deviation rate + Allowance for sampling risk.b. Risk of underreliance + Allowance for sampling risk.c. Sample rate of deviation + Allowance for sampling risk.d. Tolerable rate of deviation + Allowance for sampling risk.
Tolerable error, is the maximum monetary error that the auditor is prepared to accept in the population and still conclude that audit objective has been achieved, is directly related to
A.Sample size
BAudit risk
C.Materiality
D.Expected error
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- 3. Sample results may not be truly representative of a population due to * A. Sampling risks B. Sampling error C. Nonsampling error D. Standard deviation E. All of themarrow_forwardWhat is the relationship between sample size and (a) sampling risk, (b) tolerable rate of deviation,and (c) expected population deviation ratearrow_forwardSubject: Auditing & Assurance Principles Define the following factors that affect the determination of sample size: a) Acceptable sampling risk b) Tolerable deviation rate c) Expected deviation rate d) Tolerable misstatement e) Expected misstatement f) Variation in the populationarrow_forward
- A principal advantage of statistical methods of attribute sampling over nonstatistical methods is that they provide a scientific basis for planning the A. risk of overreliance B. tolerable rate C. expected population deviation rate D. Sample sizearrow_forwardIn determining the sample size for a test of controls, an auditor should consider the expected deviation rate, desired confidence level, and the * O Nature and cause of deviations O Population size O Risk of incorrect acceptance O Tolerable deviation ratearrow_forwardExplain how the following test of control will affect the sample size? a. An increase in the extent to which the auditor's risk assessment takes into account relevant controls b. An increase in the tolerable rate of deviation c. An increase in the expected rate of deviation of the population to be testedarrow_forward
- The distance from the sample estimate that has a certain likelihood (equal to reliability) ofincluding the true population value is known as thea. Confidence.b. Mean.c. Precision.d. Precision interval.arrow_forwardWhich 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_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
- If the _______ exceeds the _______, the audit team would decide to rely on internal control as planned and maintain control risk at planned levels.a. ULRD; tolerable rate of deviation.b. tolerable rate of deviation; ULRD.c. expected population deviation rate; tolerable rate of deviation.d. tolerable rate of deviation; expected population deviation rate.arrow_forwardWhen 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_forwardWhen evaluating the results of an MUS application, the audit team should compare the upper limit on misstatements to thea. Expected misstatement.b. Incremental allowance for sampling risk.c. Projected misstatement.d. Tolerable misstatement.arrow_forward
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