Sampling is the method of selecting few items to check from the entire population under examination. Auditors apply sampling method while performing their audit procedures. Sampling can be statistical or non statistical. To choose: the correct statement concerning the statistical sampling in tests of controls.

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Chapter 8, Problem 8.18MCQ

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Concept Introduction:

Sampling is the method of selecting few items to check from the entire population under examination. Auditors apply sampling method while performing their audit procedures.

Sampling can be statistical or non statistical.

To choose: the correct statement concerning the statistical sampling in tests of controls.

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Which one of the sentences below is FALSE? A. The risk of incorrect acceptance called beta risk has the consequence that the auditor may assume that the population is free of material misstatement. B. The risk of incorrect rejection is called alpha risk and has the consequence that the auditor may assume on the basis of sample results that a population is materially misstated when, in fact, it is not . C. The risk of incorrect acceptance is called beta risk. D. The risk of incorrect rejection very common in audit sampling is called beta risk.

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.

Which of the following statements is correct about monetary unit sampling?a. The risk of incorrect acceptance must be specified.b. Smaller logical units have a higher probability of selection in the sample than larger units.c. Each logical unit in the population has an equally likely chance of being selected in the sample.d. The projected misstatement cannot be calculated when one or more misstatements are discovered.