Introduction:Test of Control refers to the
To state:To confirm whether the statement is true or false.
Answer to Problem 1TFQ
The statement is true
Explanation of Solution
Basic Audit procedures are done through enquiry and observation while Analytical procedures are done in Audit Sampling. A Sample of the transactions is taken in order to test the controls and account balances with the conclusion that by sample transactions it is tried to check and conclude that the transactions done during the audit period represent the status of the population of transactions. Sampling is a tool where the prudence of the auditor is used to see that how skillfully he uses the samples to decide about the status of the account balances and related transactions.
Hence, the statement is True.
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Chapter 8 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
- what are Audit Assumptions?arrow_forwardSubject: Auditing & Assurance Principles Differentiate the following: a) Statistical vs Non-statistical sampling b) Attribute vs Variables samplingarrow_forwardProbability samples versus nonprobability samples; also briefly define the types of valid probability samples.arrow_forward
- 1.1.Sampling is important in an audit process. Briefly explain the value of sampling in the audit process. 1.2. Identify and explain the two types of sampling risks?arrow_forwardWhat is Audit Sampling?arrow_forwardUnderstand how to use sequential sampling,discovery sampling, and nonstatisticalsampling in attributes testing.arrow_forward
- When selecting a variables sampling approach, when should the audit team use MUS and when should it use classical variables sampling?arrow_forward1a) Briefly discuss the advantages of using statistical sampling in auditing. 1b) Discuss three types of statistical sampling techniques.arrow_forwardIn assessing sample risk, alpha risks relate to the Efficiency of the audit Selection of the sample Effectiveness of the audit Audit quality controlsarrow_forward
- (c)Describe the factors which theauditor should consider whendetermining the size of a sample. (d) Describe to what extent statistical sampling enhances the quality of the audit evidence. (e) Explain how judgementis used in statistical and non-statistical sampling.arrow_forwardWhich of the following statistical techniques are used to test controls? Mean-per-unit sampling. Attribute sampling. Difference estimation. Ratio estimation.arrow_forwardWhat is the purpose of sampling in auditing? Why is it relevant in performing test of controls and substantive testing?arrow_forward
- Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage LearningAuditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub