AUDITING+ASSURANCE SERVICES (LL)
11th Edition
ISBN: 9781266448119
Author: MESSIER
Publisher: MCG
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Question
Chapter 8, Problem 8.22P
To determine
Concept Introduction:
Audit sampling: sampling is the method of selecting few items to check from the entire population under examination. Auditors apply sampling method while performing their
To Match: the term to the definitions
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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.
In audit sampling applications, sampling risk isa. A characteristic of statistical sampling applications but not of nonstatistical applications.b. The probability that the audit team will fail to recognize erroneous accounting in the client’sdocumentation.c. The probability that accounting misstatements will arise in transactions and enter theaccounting system.d. The probability that an audit team’s conclusion based on a sample might be differentfrom the conclusion based on an audit of the entire population.
In using audit sampling for exception rates:
the auditor wants to know the most the exception rate is likely to be.
sampling error is the likelihood that the auditor will miss a monetary misstatement.
the upper limit of the interval estimate is known as the sampling risk.
CUER cannot be considered in the context of specific audit objectives.
Chapter 8 Solutions
AUDITING+ASSURANCE SERVICES (LL)
Ch. 8 - Prob. 8.1RQCh. 8 - Prob. 8.2RQCh. 8 - Prob. 8.3RQCh. 8 - Prob. 8.4RQCh. 8 - Prob. 8.5RQCh. 8 - Prob. 8.6RQCh. 8 - Prob. 8.7RQCh. 8 - Prob. 8.8RQCh. 8 - Prob. 8.9RQCh. 8 - Prob. 8.10RQ
Ch. 8 - Prob. 8.11MCQCh. 8 - Prob. 8.12MCQCh. 8 - Prob. 8.13MCQCh. 8 - Prob. 8.14MCQCh. 8 - Prob. 8.15MCQCh. 8 - Prob. 8.16MCQCh. 8 - Prob. 8.17MCQCh. 8 - Prob. 8.18MCQCh. 8 - Prob. 8.19MCQCh. 8 - Prob. 8.20MCQCh. 8 - Prob. 8.21PCh. 8 - Prob. 8.22PCh. 8 - Prob. 8.23PCh. 8 - Prob. 8.24PCh. 8 - Prob. 8.25PCh. 8 - Prob. 8.26PCh. 8 - Prob. 8.27PCh. 8 - Prob. 8.28PCh. 8 - Prob. 8.29PCh. 8 - Prob. 8.30PCh. 8 - Prob. 8.31P
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Similar questions
- In which of the following situations would an auditor most likely choose a substantive strategy and avoid sampling transactions to test controls? O The population size is large. O The expected deviation rate is less than the tolerable deviation rate. O The tolerable deviation rate is less than the expected deviation rate. O The revised materiality level is lower than the planned level.arrow_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_forwardWhich of the following is an advantage of nonstatistical sampling?a. It measures the audit team’s exposure to sampling risk.b. It is required by generally accepted auditing standards.c. It ensures that samples are randomly selected.d. It is typically less complex than statistical samplingarrow_forward
- 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.arrow_forwards1: The only way to know with certainty whether a sample Is representative is to subsequently audit the entire population. s2: One way to control sampling risk is to increase the sample size. s3: Sampling risk results from the auditor's failure to recognize exceptions in transaction data. A. all statements are true b. all statements are false c. s1 and s2 are true d. s1 and s3 are truearrow_forwardSubject: Auditing & Assurance Principles Differentiate the following: a) Statistical vs Non-statistical sampling b) Attribute vs Variables samplingarrow_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_forward.What is the effect on sample size for substantive procedures of an increase in the total error that the auditor is willing to accept increase decrease negligible effect no effectarrow_forwardAn advantage of statistical sampling over nonstatistical sampling methods is that statistical methodsa. Afford more assurance than a nonstatistical sample of equal size.b. Provide an objective basis for quantitatively evaluating sampling risk.c. Can more easily convert the sample into a dual-purpose test useful for substantive procedures.d. Eliminate the need to use judgment in determining appropriate sample sizesarrow_forward
- 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 riskarrow_forwardWhich one of the following is the main problem with using non-probability sampling technique? a. The expense b. The results are never representative c. Human judgement error d. Non co-operation of informants FAST PLIZarrow_forward• The Choose the answer from the menu in accordance to the question statement _--_ method includes both an estimate of the audited value of the population (or the amount of misstatements in the population) and an estimate of a statistical confidence interval, or allowance for sampling risk associated with the estimate. > Appropriate > Statstical sampling > Non-statistical sampling • Control risk is the risk that the sample chosen by the auditor is not representative of the population of transactions or items within an account balance and, as a consequence, the auditor arrives at an inappropriate conclusion. True Falsearrow_forward
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