GEN COMBO LL PRINCIPLES OF AUDITING & OTHER ASSURANCE SERVICES; CONNECT AC
21st Edition
ISBN: 9781260427202
Author: Ray Whittington, Kurt Pany
Publisher: McGraw-Hill Education
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Question
Chapter 9, Problem 37BOQ
To determine
Identify the appropriate answer related to the assessment of the sampling risk
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In assessing sample risk, alpha risks relate to the
Efficiency of the audit
Selection of the sample
Effectiveness of the audit
Audit quality controls
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?
The risks of incorrect acceptance in variables sampling and of overreliance in attributessampling both relate toa. Effectiveness of an audit.b. Efficiency of an audit.c. Control risk assessment decisions.d. Evidence about assertions in financial statements.
Chapter 9 Solutions
GEN COMBO LL PRINCIPLES OF AUDITING & OTHER ASSURANCE SERVICES; CONNECT AC
Ch. 9 - Prob. 1RQCh. 9 - Prob. 2RQCh. 9 - Prob. 3RQCh. 9 - Prob. 4RQCh. 9 - Prob. 5RQCh. 9 - Prob. 6RQCh. 9 - Prob. 7RQCh. 9 - Prob. 8RQCh. 9 - Prob. 9RQCh. 9 - Prob. 10RQ
Ch. 9 - Prob. 11RQCh. 9 - Prob. 12RQCh. 9 - What is a dual-purpose test?Ch. 9 - Prob. 14RQCh. 9 - Prob. 15RQCh. 9 - Prob. 16RQCh. 9 - What would be the difference between an attributes...Ch. 9 - Prob. 18RQCh. 9 - Prob. 19RQCh. 9 - Prob. 20RQCh. 9 - Prob. 21RQCh. 9 - Prob. 22RQCh. 9 - Prob. 23RQCh. 9 - Prob. 24RQCh. 9 - Prob. 25RQCh. 9 - Prob. 26RQCh. 9 - Prob. 27RQCh. 9 - Prob. 28RQCh. 9 - Prob. 29QRACh. 9 - Prob. 30QRACh. 9 - Prob. 31QRACh. 9 - Prob. 32QRACh. 9 - Prob. 33QRACh. 9 - Prob. 34QRACh. 9 - Prob. 35QRACh. 9 - Prob. 36QRACh. 9 - Prob. 37AOQCh. 9 - Prob. 37BOQCh. 9 - Prob. 37COQCh. 9 - Prob. 37DOQCh. 9 - Prob. 37EOQCh. 9 - Prob. 37FOQCh. 9 - Prob. 37GOQCh. 9 - Prob. 37HOQCh. 9 - Prob. 37IOQCh. 9 - Prob. 37JOQCh. 9 - Prob. 37KOQCh. 9 - Prob. 37LOQCh. 9 - Prob. 38OQCh. 9 - Prob. 39OQCh. 9 - For each term in the first column below, identify...Ch. 9 - Prob. 41OQCh. 9 - Smith, Inc. Rachel Robertson wishes to use...Ch. 9 - Prob. 43OQCh. 9 - Prob. 44PCh. 9 - Prob. 45PCh. 9 - Prob. 46PCh. 9 - Prob. 47PCh. 9 - In the audit of Potomac Mills, the auditors wish...Ch. 9 - Prob. 49PCh. 9 - Prob. 50PCh. 9 - Prob. 51PCh. 9 - Prob. 52ITC
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Similar questions
- The 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_forwardWhat are the risks if the auditor concludes controls are operating effectively based on the sample and Control Risk is set too low?arrow_forwardDiscuss the differences between a first-party, second-party, and third-party audit. Discuss the importance of data accuracy and integrity in a quality information system. What are the purposes of quality documentation systems? What would be the foremost characteristics of an acceptable sampling plan for critical defects?arrow_forward
- When the auditor has assessed control risk of a particular area at a reduced level, he or she will then Select one: a. eliminate the need to gather evidence in that area. b. test the effectiveness of the controls in that area. c. proceed to expand the sample sizes in that area. d. negotiate with management to determine which controls will be tested in that area.arrow_forwardFor both tests of controls and substantive tests of details, non-sampling risk can be reduced by increasing sample size, while sampling risk can be reduced by proper engagement planning supervision and review. TRUE OR FALSE? WHY?arrow_forwardWhen evaluating the results of an MUS application, the audit team should compare the upper limit on misstatements to thea. Expected misstatement.b. Incremental allowance for sampling risk.c. Projected misstatement.d. Tolerable misstatement.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_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_forwardVariables sampling plans focus on a. Rates of deviation from prescribed control procedures. b. Assessing the effective operation of management's controls. c. The risk of assessing control risk too high. d. Monetary balances.arrow_forward
- Tolerable error, is the maximum monetary error that the auditor is prepared to accept in the population and still conclude that audit objective has been achieved, is directly related to A.Sample size BAudit risk C.Materiality D.Expected errorarrow_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_forwardIn an environment that is highly automated, an auditor determines that it is not possible toreduce detection risk solely by using substantive tests of transactions. Under these circumstances, the auditor most likely woulda. Perform tests of controls to support a lower level of assessed control risk.b. Increase the sample size to reduce sampling risk and detection risk.c. Adjust the materiality level and consider the effect on inherent risk.d. Apply analytical procedures and consider the effect on control riskarrow_forward
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