25984285
Description
Quiz by Kayla Harbaugh, updated more than 1 year ago
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Created by Kayla Harbaugh
over 3 years ago
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Question 1
Question
Which of these questions would an auditor ask when sampling to perform tests of controls?
Answer
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Which population and sampling unit should be tested, and what characteristics should be examined?
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How many items should be selected for audit testing?
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Which items should be included in the sample?
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What inferences can be made about the overall population from the sample?
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All of these
Question 2
Question
Refer to Exhibit 8.2 and determine which of the following phrases matches this definition:
The risk that the auditor will conclude that internal controls are effective when internal controls are actually not effective.
Answer
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The risk of incorrect acceptance of internal control reliability.
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The risk of incorrect acceptance of book value
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The risk of incorrect rejection of internal control reliability
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The risk of incorrect rejection of book value
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None of these
Question 3
Question
Refer to Exhibit 8.4 and determine which of the following statements is true.
Answer
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In nonstatistical sampling, sample size is determined by auditor judgment.
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In statistical sampling, the sample must be randomly selected to give each unit in the population an equal chance to be included in the sample.
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In nonstatistical sampling, evaluation is based on auditor judgment and projections are based on sample results.
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In statistical sampling, the auditor is required to define acceptable risk in advance.
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All of these are true
Question 4
Question
In attributes sampling, which of the following will not affect the determination of sample size?
Answer
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The expected population deviation rate
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Sampling risk
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The tolerable rate of deviation
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The risk of incorrect rejection of book value
Question 5
Question
Which of the following definitions is true?
Answer
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Factual misstatement—A misstatement that has been specifically identified and about which there is no doubt.
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Projected misstatement—The auditor's best estimate of the misstatement in a given population based on projecting the sample results to the population.
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Tolerable misstatement—A monetary amount set by the auditor in respect of which the auditor seeks to obtain an appropriate level of assurance that the monetary amount set by the auditor is not exceeded by the actual misstatement in the population.
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Expected misstatement—The level of misstatement that the auditor expects to detect.
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All of these are true
Question 6
Question
Which of the following represents the calculation of the sampling interval?
Answer
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Tolerable error × Risk of incorrect acceptance.
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Sample size ÷ Population size.
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Tolerable error ÷ Risk of incorrect acceptance.
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Population size ÷ Sample size.
Question 7
Question
Sampling can be used for both tests of controls and substantive tests of account balances and assertions.
Answer
- True
- False
Question 8
Question
Block sampling involves selecting a sample that consists of contiguous population items, such as selecting transactions by day or week.
Answer
- True
- False
Question 9
Question
Top-stratum items are population items whose book values exceed the sampling interval and are therefore excluded from the sample.
Answer
- True
- False
Question 10
Question
Benford's Law helps predict frequency patterns of deviations of controls.
Answer
- True
- False
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