Chapter 9 Homework Questions

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High levels of assurance mean _______.     A. lower levels of non-sampling risk that the sample is not representative of the population   B. higher levels of non-sampling risk that the sample is not representative of the population   C. lower levels of sampling risk that the sample is not representative of the population   D. higher levels of sampling risk that the sample is not representative of the population

.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 effect

A number of factors influences the sample size for a substantive test of details of an account balance. All other factors being equal, which of the following would lead to a larger sample size? a. Smaller measure of tolerable misstatement. b. Greater reliance on internal control. c. Smaller expected frequency of errors. O d. Greater reliance on analytical procedures.

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 error

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STATEMENT 1: In an audit sampling application, detection risk arises from the uncertainties of nonsampling risk and sampling risk. STATEMENT 2: Non sampling risk can be reduced to an acceptably low level by a 100% examination of the account balance or transaction class. A. Only Statement 1 is incorrect B. Only Statement 1 is correct C. Both statements are incorrect D. Both statements are correct

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s1: 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 true

Chapter 08 Problem 8-26 LO 8-6 Use the sample sizes and the number of deviations determined below. Parameters Risk of incorrect acceptance Tolerable deviation rate. Expected population deviation rate Sample size (using tables). Sample size (using IDEA) Results Number of deviations Sample size Sample deviation rate - Computed upper deviation rate using Tables 1-Sided upper limit using IDEA Auditor's conclusion 5% 4% 18 156 156 Does support 0 156 Control Procedure 2 00% 20 % Determine the sample deviation rate, the computed upper deviation rate, and the auditor's conclusion (ie, testing results do or do not support operating effectiveness of the control) for each control procedure. (For Results, use Table 8-8 & Table 8-9 or IDEA) Note: Round your rates values to 1 decimal place. 5% 5% 2% 0.00% 181 181 3 10% 7% 3% 94 94 2 4 10% 8% 5 181 2.80 % 6.90 % 0.00% Does not support 98 98 Control Procedure 4 94 Does not support % 8.7% 0.00% Does support 3 98 3.1 % 7.3 % 0.0 % 30

Question 27, please. It uses the numbers / information from #26. Thank you.

s1: A stratified sample consist of sampling units selected without conscious bias. s2: All auditing procedures involve audit sampling. s3: A deviation from prescribed control procedures does not necessarily indicate the presence of monetary error  A. all statements are true b. all statements are false c. s1 and s2 are true d. s1 and s3 are true

STATEMENT 1: If the sampling unit is defined as the individual disbursement entry in the check register, the sampling frame would be the check voucher and its supporting documents. A STATEMENT 2: Not all audit tests applied to less than 100% of the populatian are considered audit sampling applications. A. Only Statement 1 is incorrect B. Only Statement 1 is correct C. Both statements are incorrect D. Both statements are correct

8 Audit Sampling is an investigative step or technique where less than 100% of the total items within the population of items are selected to be audited.   Question 8 options:   a) True   b) False

3. Sample results may not be truly representative of a population due to * A. Sampling risks B. Sampling error C. Nonsampling error D. Standard deviation E. All of them