Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN: 9781305080577
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: South-Western College Pub
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Question
Chapter 8, Problem 38RSCQ
To determine
Introduction: While planning for the audit, an auditor set a tolerable limit of the risk. That limit is called the rate of deviation.
Describe the tolerable rate of deviation.
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Students have asked these similar questions
What is the definition of audit sampling based on PAS 530?
Subject: Auditing & Assurance Principles
Differentiate the following:
a) Statistical vs Non-statistical sampling
b) Attribute vs Variables sampling
(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.
Chapter 8 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
Ch. 8 - Prob. 1TFQCh. 8 - Prob. 2TFQCh. 8 - Prob. 3TFQCh. 8 - Prob. 4TFQCh. 8 - Prob. 5TFQCh. 8 - Prob. 6TFQCh. 8 - Prob. 7TFQCh. 8 - Prob. 8TFQCh. 8 - Prob. 9TFQCh. 8 - Prob. 10TFQ
Ch. 8 - Prob. 11TFQCh. 8 - Prob. 12TFQCh. 8 - Prob. 13TFQCh. 8 - Prob. 14TFQCh. 8 - Prob. 15MCQCh. 8 - Prob. 16MCQCh. 8 - Prob. 17MCQCh. 8 - Prob. 18MCQCh. 8 - Prob. 19MCQCh. 8 - Prob. 20MCQCh. 8 - Prob. 21MCQCh. 8 - Refer to Exhibit 8.6. Assume a 5% risk of...Ch. 8 - Prob. 23MCQCh. 8 - Prob. 24MCQCh. 8 - Prob. 25MCQCh. 8 - Prob. 26MCQCh. 8 - Prob. 27MCQCh. 8 - Prob. 28MCQCh. 8 - Prob. 29RSCQCh. 8 - Prob. 30RSCQCh. 8 - Prob. 31RSCQCh. 8 - Prob. 32RSCQCh. 8 - Prob. 33RSCQCh. 8 - Prob. 34RSCQCh. 8 - Prob. 35RSCQCh. 8 - Prob. 36RSCQCh. 8 - Prob. 37RSCQCh. 8 - Prob. 38RSCQCh. 8 - Prob. 39RSCQCh. 8 - Prob. 40RSCQCh. 8 - Prob. 41RSCQCh. 8 - Prob. 42RSCQCh. 8 - Prob. 43RSCQCh. 8 - Prob. 44RSCQCh. 8 - Prob. 45RSCQCh. 8 - Prob. 46RSCQCh. 8 - Prob. 47RSCQCh. 8 - What is stratification? Distinguish between...Ch. 8 - Prob. 49RSCQCh. 8 - Prob. 50RSCQCh. 8 - Prob. 51RSCQCh. 8 - Prob. 52RSCQCh. 8 - Prob. 53RSCQCh. 8 - Prob. 54RSCQCh. 8 - Prob. 55RSCQCh. 8 - Prob. 56RSCQCh. 8 - Prob. 57RSCQCh. 8 - Prob. 58RSCQCh. 8 - Prob. 59RSCQCh. 8 - Prob. 60RSCQCh. 8 - Prob. 61RSCQCh. 8 - Prob. 62RSCQCh. 8 - Prob. 63RSCQ
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Similar questions
- 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.arrow_forwardWhich of the following is the exception rate that the auditor expects to find before testing? Sample exception rate Estimated population exception rate Computed exception rate Tolerable exception 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
- Describe basic allowance for sampling risk.arrow_forwardList and discuss the decisions involving professional judgment that must be made by the CPAs in applying statistical sampling techniques to tests of controls.arrow_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
- Which of the following steps involved with determining the upper limit on misstatements is ordinarily performed earliest?a. Multiply the sampling interval by the tainting percentage.b. Determine the audited value of the item and compare it to the recorded balance.c. Calculate the basic allowance for sampling risk.d. Calculate the incremental allowance for sampling risk.arrow_forwardWhich of the following components of the audit risk model is most closely associated with attributes sampling?a. Audit risk.b. Control risk.c. Detection risk.d. Inherent risk.arrow_forwardDefine the terms precision (allowance for sampling risk), reliability (confidence), and precisioninterval.arrow_forward
- 1a) Briefly discuss the advantages of using statistical sampling in auditing. 1b) Discuss three types of statistical sampling techniques.arrow_forward1.1.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_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
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