According to ISA 530, Auditing sampling reference to the application of audit procedure: Less than 100% of items. Less than 90% of items. Selecting specific items. Selecting all items for testing.
Q: Monetary Unit Sampling Misstatement Factors for Sample Evaluation TABLE 9-3 90% Desired Confidence…
A: Monetary unit sampling (MUS) It is a method of sampling that determines if there is any misstatement…
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Q: An auditor is determining the appropriate sample size for testinginventory valuation using MUS. The…
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A: a. b.
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A: Hey, since there are multiple requirements posted, we will answer first three requirements. If you…
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A: Projected misstatement: It can be defined as the difference between the audited value and the…
Q: 9-13
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A: Audit sampling is a process or procedure in which a sample of items are selected from the total…
Q: Determine the Sample size in the AHMED Company according to the following data: Book value of…
A: The answer is stated below:
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A: Answer: option b
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Q: more emphasis on
A: The correct statement is True
Q: The audit staff assigned to audit Maintenance Expenses totaling $4,900,000 selected a sample of…
A: Auditing means the independent checking of company operation by outsider. Auditor is qualified and…
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Q: a. Based on Jackson’s sample, determine the sample rate of deviation and ULRD. (Because the AICPA…
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Q: Attributes Sampling with IDEA: Evaluating Sample Results. Based on a population sizeof 388…
A: a.
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A: Classical variable sampling: It is a sampling method in which each record is considered as a…
Q: Using difference estimation, an auditor has taken a sample of 75 from a population's 25,000 items;…
A: Formula: Average decrease per item = Average book value per item - Average Audited value per item.
Q: Baily Cox, an audit manager, judged that the test of controls of the company’s 50,000 purchase…
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Q: Which of the following would not result in the audit team’s selecting a larger sample of controlsfor…
A: Sampling: Sampling allows an individual to obtain information about the population of interest in…
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Q: means the application of audit procedures to less than 100% of the items within an account balance…
A: Correct is Option C - Audit Sampling Audit sampling Means application of Audit procedures to less…
Q: In non-statistical sampling, _______. the auditor determines samples size, sample selection…
A: Note: Since you have posted a question with multiple sub-parts, we will solve the first three…
Q: Evaluating a Sampling Application. Tom Barton, an assistant accountant with a local CPAfirm,…
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Q: For each population, did the auditor select a smaller sample size than is indicated by using the…
A: As per the guidelines we can can provide the solution for 3 sub part only. To get the answer of…
Q: Sample Results Evaluation. Jamie Plane is testing the effectiveness of an important controlfor…
A: a.
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A: “Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get…
Q: Which of the following statements is not true with respect to nonstatistical sampling?a. It cannot…
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A: Audit sampling is an investigative technique in which a sample of fewer than 100% of the total items…
Q: In an MUS sample with a sampling interval of $5,000, an auditor discovered that aselected accounts…
A: Given: Sampling interval = $ 5,000 Amount recorded on accounts receivable = $ 10,000 Audit value = $…
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Q: STATEMENT 1: Since audit sampling is an essential part of the audit process, each step in an audit…
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Q: Audit sampling involves applying an audit procedure to less than 100 percent of the population for…
A: Sampling Risk :- Sampling threat is the opportunity that the objects decided on in a pattern…
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- Audit sampling involves applying an audit procedure to less than 100 percent of the population for the purpose of evaluating some characteristic of the population. The fact that an audit involves sampling is noted in the scope paragraph of the auditor’s report, which contains the phrase “An audit includes examining, on a test basis.” When an auditor uses sampling, an element of uncertainty enters into the auditor’s conclusions.Required:a. Explain the auditor’s justification for accepting the uncertainties that are inherent in the sampling process.b. Discuss the uncertainties that collectively embody the concept of audit risk.c. Discuss the nature of sampling risk and nonsampling risk. Include the effect of sampling risk on tests of controls.Audit sampling involves applying an audit procedure to less than 100 percent of the population for the purpose of evaluating some characteristic of the population. when an auditor uses sampling, an element of uncertainty enters into the auditor’s conclusions.Required:a. Explain the auditor’s justification for accepting the uncertainties that are inherent in the sampling process.b. Discuss the uncertainties that collectively embody the concept of audit risk.c. Discuss the nature of sampling risk and nonsampling risk. Include the effect of sampling risk on tests of controls.In an MUS sample with a sampling interval of $5,000, an auditor discovered that aselected accounts receivable with a recorded amount of $10,000 had an audit valueof $8,000. If this is the only error discovered by the auditor, the projected error ofthe sample would be(1) $1,000. (3) $4,000.(2) $2,000. (4) $5,000.
- If the UML or Projected Misstatement in a sampling is $8,000, while the tolerable misstatement is $9,000, what would an auditor likely conclude? A) Since the UML or Projected Misstatement is less than the tolerable misstatement, the account is not materially misstated. B) Since the UML or Projected Misstatement is less than the tolerable misstatement, the account is misstated. C) The analysis has been improperly performed since the UML or Projected Misstatement is unequal to the tolerable misstatementCalculate total projected mistreatment if the following three mistreatments were discovered in a PPS sample when the sampling interval is $1,000. Recorded Amount Audit Amount Sampling interval Total Projected Mistreatment 1st mistreatment $400 $320 $1,000 _________________ 2nd mistreatment 500 0 $1,000 _________________ 3rd mistreatment 3,000 2,500 $1,000 _________________TRUE OR FALSE When evaluating the results of specific items selected for testing, its effects must be projected to the whole population. Audit sampling refers to the application of audit procedures to less than 100% of the items in account balance or class of transactions for the purpose of evaluating some of its characteristics. In performing external confirmations, the management prepares the requests and receives and replies for communication to the auditor. One of the ways to gain knowledge of any lirigations and claims is through an examination of professional or legal expenses and related source documents. Related parties generally unreliable in nature which leads to the auditor performing procedures to examine transactions with them.
- d. Assume that based on additional controls implemented by ELM, your audit team has decided to reduce the expected misstatement from $77,928 to $19,482 (0.5 percent of the recorded balance of the transactions). What is the necessary sample size, holding all other factors constant?Baily Cox, an audit manager, judged that the test of controls of the company’s 50,000 purchase transactions should be based on a tolerable rate of deviation of 6 percent, a risk of overreliance of 5 percent, and an expected population deviation rate of 3 percent. Using AICPAsample size tables, Cox determined that the appropriate sample size in this situation would bea. 49.b. 78.c. 132.d. 195Which of the following statements is false? A) Top-stratum items are population items whose book value likely exceed the Sampling Interval and would be all selected for examination and evaluation during the audit. B) Because the auditor knows the full amount of errors in the top stratum (since all items are evaluated), no estimate of errors or projection to the population for the errors in the top stratum is required. C) The auditor's evaluation of the most likely misstatements in the sample reflects the sum of the misstatements from the top-stratum and the projected misstatement derived from the each lower-stratum items D) None of the above
- Evan Kristopher, CPA intends to use probability-proportional-to-size sampling. He has properly selected and audited a sample of 100 accounts receivable from his client’s population of 3,000 accounts. He calculated a sampling interval of $6,000 and the tolerable misstatement for the account is $30,000. Evan also recalls that “basic precision” is equal to the appropriate reliability factor multiplied times the sampling interval. He wishes to accept a risk of incorrect acceptance of 10%. He found that 97 of the 100 accounts in the sample were properly calculated. However, the following three errors existed: Book Value Audited Value $75 $70 1,000 750 9,300 6,720 Required: Calculate the projected misstatement. Calculate the basic precision. Calculate the incremental allowance. Calculate the upper limit on misstatement. What would the auditors’ conclusion be for the population based on the analysis? explain pleaseEvan Kristopher, CPA intends to use probability-proportional-to-size sampling. He has properly selected and audited a sample of 100 accounts receivable from his client’s population of 3,000 accounts. He calculated a sampling interval of $6,000 and the tolerable misstatement for the account is $30,000. Evan also recalls that “basic precision” is equal to the appropriate reliability factor multiplied times the sampling interval. He wishes to accept a risk of incorrect acceptance of 10%. He found that 97 of the 100 accounts in the sample were properly calculated. However, the following three errors existed: Book Value Audited Value $75 $70 1,000 750 9,300 6,720 Required: Calculate the projected misstatement. Calculate the basic precision. Calculate the incremental allowance. Calculate the upper limit on misstatement. What would the auditors’ conclusion be for the population based on the analysis?Which of the following statements is not true with respect to the calculation of the upperlimit on misstatements?a. The tainting percentage is determined based on the difference between the recorded balance and the audited value.b. A separate incremental allowance for sampling risk is calculated for each misstatementdiscovered by the auditor.c. If no misstatements are detected, the basic allowance for sampling risk equals zero.d. The projected misstatement is determined by multiplying the sampling interval by thetainting percentage.