For which of the following audit procedures would sampling be most appropriate?
Inquiry
Confirmation
Analytics
Observation
Which one of the following is not a decision the auditor makes when using attributes sampling?
Whether to document all phases of the sampling process
Evaluation of sample information
Selection of items included in the sample
Sample size
Which one of the following is a decision the auditor makes when using attributes sampling?
The sampling unit
Period covered by testing
Completeness of the population
All of the above are auditor decisions
Which of the following describes sampling risk?
The sample size will be larger than needed.
The auditor incorrectly applies sampling methodology.
The population will not contain characteristics representative of the sample such that inferences made about that sample will be incorrect.
The sample will not contain characteristics representative of the population such that inferences made about that population will be incorrect.
Which of the following occurs when, based on sample results, control risk is assessed excessively high?
A less expensive audit
Errors that are more likely to occur than anticipated
Reduction of substantive testing
Audit inefficiency
Concluding that the book value of inventory is correct when it is materially misstated is an example of which of the following risks?
Incorrect rejection
Incorrect acceptance
Insufficient sample size
None of the above
When performing sampling, the auditor is most concerned with which of the following?
Risk of incorrect acceptance
Risk of excess sample size
Risk of errors in the population
Risk of incorrect rejection
While auditors may use either statistical or nonstatistical sampling, some auditors restrict the use of nonstatistical sampling for what reason?
It is less objective
It is less effective
It is less efficient
It is less risky
Which of the following is the level at which the control’s failure to operate would cause the auditor to conclude that the control is not effective and would likely change the auditor’s planned assessment of control risk in performing tests of account balances?
Allowable risk of assessing control risk too low
Allowance for sampling error
Tolerable failure rate
Expected failure rate
When performing attributes sampling, which of the following varies directly with the sample size?
The tolerable failure rate
The risk of over-reliance
The non-sampling risk
The expected failure rate
In analyzing misstatements using sampling techniques, the auditor should analyze the misstatements in what manners?
Absolutely and proportionately
Haphazardly and randomly
Methodically and systematically
Qualitatively and quantitatively
In testing account balances, haphazard sampling is an acceptable method of sampling provided the auditor believes the sample to be which of the following?
Statistically sound
Representative of the population
In the upper stratum
Representative of the sample
When determining sample size in attributes sampling, which of the following is usually true?
Tolerable misstatement amount is determined
Sampling risk will be too high
Population size is not a factor
A failure rate is not to be expected
Which of the following is a factor that the auditor should consider when choosing between nonstatistical and statistical sampling?
Whether the audit staff is adequately trained to use statistical sampling
Whether the population lends itself to use a random-based selection method
Whether the auditor wants a statistical measure of the risk of drawing a wrong conclusion
All of the above
When confirming receivables in testing for overstatements, assume that there are few or no misstatements expected and the selection will be based on the dollar value of individual items. Which of the following is the auditor most likely to use?
Stratified mean-per-unit sampling
Attribute sampling
Ratio estimation sampling
MUS sampling
The results of MUS sampling will be unacceptable when the total estimated misstatement exceeds which of the following?
The tolerable misstatement amount
The expected deviation rate
The tolerable error rate
The expected deviation amount
MUS is based on which of following?
Attributes sampling
Classical variables sampling
Expected error sampling
Population variability sampling
MUS is designed to test for which of the following?
Understatements
Either understatements or overstatements
Overstatements
Neither understatements or overstatements
When using MUS, an auditor found that the sampling interval should be $15,755. If selecting the sample manually, the auditor should round the sample interval to which of the following amounts?
$16,000
$15,000
$10,000
$14,000
When planning a test of details using MUS sampling, tolerable misstatement is usually set at what level?
Lower than the expected error amount
Higher than performance materiality
Lower than performance materiality
Higher than the expected error amount
In MUS, what is meant by a sampling interval of 900?
Expected misstatement is 900
Every 900th dollar will be selected
Tolerable misstatement is 900
Every 900th item will be selected
Which one of the following is a proper course of action for the auditor when the total estimated misstatement exceeds the tolerable misstatement?
The auditor can ask the client to correct the known misstatements
The auditor will analyze the detected misstatements for some common problems
The auditor can expand the sample
The auditor will do which of the following when the results of sample testing conclude that there is misstatement in excess of the tolerable misstatement?
Throw out the sample
Propose adjustments to the client
Issue a disclaimer of opinion
Disclose the misstatement in the client's financial statements
In attributes sampling, which of the following does the risk of incorrect acceptance deal with?
Effectiveness
Efficiency
Reliability
Both A and B
In attributes sampling, the risk of incorrect rejection deals with which of the following?
Which of the following is a factor of nonsampling risk?
Using non statistical sampling
Using a random sample selection
Having a sample which does not represent the population
Not carrying out the appropriate audit procedure
In selecting a sample for attributes testing, haphazard selection involves which of the following approaches?
An arbitrary selection with no conscious bias
Every nth item being selected after a random start
Selecting all items on a day or week
Each item in the population having an equal chance of selection
In selecting a sample for attributes testing, block sampling involves which of the following approaches?
Which of the following tasks is not performed by data analytics tools?
Footing a file
Obtaining file statistics
Checking for gaps in processing sequences
Preparing custom reports
All of the above tasks can be performed using data analytics tools
Which of the following data analytics tools might an auditor use to test the completeness assertion for sales?
Analyze data to assess the proper operation of sales cutoff tests around year-end
Age accounts receivable
use data visualization tools to evaluate disclosures about sales and profitability
