AUDITING RMU
11th Edition
ISBN: 9781260934830
Author: MESSIER
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 8, Problem 8.3RQ
To determine
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
Sampling can be statistical or non statistical.
To indicate: the audit evidences which do not involve sampling.
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Students have asked these similar questions
What are the risks if the auditor concludes controls are operating effectively based on the sample and Control Risk is set too low?
What is “tolerable misstatement”? How is this concept applied when auditors perform audit tests on a sample?
Ordinarily, risk assessment procedures do not involve the use ofaudit sampling. However, the auditor often plans and performs tests of controls concurrently with obtaining an understanding of the design of controls and determining whether they have been implemented.
TRUE OR FALSE? WHY?
Chapter 8 Solutions
AUDITING RMU
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
- Why is the audit team more concerned with the risk of overreliance than with the risk of underreliance?arrow_forwardIt's important to explain what lapping is and how an auditor may find it. When should the auditor put in extra effort to detect instances of lapping?arrow_forwardList three situations where the auditor would be unlikely to use audit sampling techniques.arrow_forward
- The two types of sampling risks that auditors face include the risk of incorrect acceptance and the risk of incorrect rejection. What do each of these mean and how will each impact the audit process and the audit results? Which is considered the more important risk?arrow_forwardWhen would an auditor prefer to conduct a black-box audit? What about a white-box audit?arrow_forwardRisk of incorrect rejection is defined as _______. the risk that the auditor concludes that a material misstatement does not exist when it does exist the risk that the auditor concludes that a material misstatement exists when it does not exist the risk that an auditor incorrectly rejects a client the risk that management may reject the audit opinion issued by the auditor An advantage of statistical sampling _______. is that it allows an auditor to measure control risk is that it allows an auditor to measure sampling risk is that it allows an auditor to measure inherent risk is that it is cheaper to perform, resulting in lower audit fees for the clientarrow_forward
- Which of the following is not an advantage of non-statistical sampling? a) It allows an auditor to select a sample that they believe is appropriate. b) It allows an auditor to measure sampling risk. c) It is lower cost than statistical sampling. d) It requires less staff training.arrow_forwardIn 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.arrow_forwardThe two types of sampling risks auditors face include the risk of incorrect acceptance and the risk of incorrect rejection. What do each of these mean and how will each impact the audit process and the audit results?arrow_forward
- Which of the following regarding the level of materiality is correct? Select one: a. An increase in materiality will decrease the amount of substantive testing b. In order to decrease detection risk, the auditor would increase materiality. c. A higher risk of material misstatement will require an increase in materiality d. A decrease in materiality will result in a decrease in the cost of an auditarrow_forwardWhich of the following statements is not true with respect to nonstatistical sampling?a. It cannot be used in an audit conducted in accordance with generally accepted auditing standards.b. It considers a number of factors in determining the appropriate sample size.c. When using it, an individual makes some estimate of the characteristic of interest.d. It requires the use of judgment on the part of the individual performing the sampling application.arrow_forwardAuditors must be aware of sampling risks because: A The risk of type 2 error due to increased sampling might be avoided by increasing tests of controlsB The risk of a type 2 error is that decreased sampling might be avoided by increasing the materiality thresholdC The risk of a type 1 error due to decreased sampling might be avoided by reducing the substantive testsD The risk of a type 2 error is that a decreased sample might have a greater impact on audit costsE The risk with a type 1 error is that increased sampling will not have a greater impact on the auditor's opinionarrow_forward
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