STATEMENT 1: The concept of audit sampling serves to discourage auditors from overauditing or underauditing the client's financial statements. STATEMENT 2: When performing tests of controls and substantive tests of details, the auditor is not required to examine all documentary evidence available. A. Only Statement 1 is incorrect B. Only Statement 1 is correct C. Both statements are incorrect D. Both statements are correct

Q: Determine which of the following is most correct statement regarding the reliability of audit…

A: Auditing refers to the process of physically inspecting all the financial records of an entity or an…

Q: Auditors obtain reasonable assurance that financial statements are fairly stated by performing all…

A: Reasonable assurance is the term of auditing which states the level of the assurance auditors are…

Q: different types of sampling risks

A: Audit sampling is a part of auditing in which auditor selects some of the samples from the…

Q: In connection with the examination of financial statements by applying PSA 240 & 300, an independent…

A: Auditor: A person authorized to verify & review the accuracy of financial statements. & To…

Q: List three situations where the auditor would be unlikely to use audit sampling techniques.

A: Audit sampling techniques are the techniques used by the auditor while auditing the entity where the…

Q: Ordinarily, risk assessment procedures do not involve the use of audit sampling. However, the…

A: The purpose of audit risk assessment is to gain a better understanding of Organisation and its…

Q: Mr. Mohammed, the auditor of Sunrise LLC planned the audit properly and performed it in accordance…

A: Audit risk is the risk that  the financial statements may contain misstatements even though auditor…

Q: Which one of the sentences below is FALSE? A. The risk of incorrect acceptance called beta risk has…

A: Auditing means the independent checking of company operation by outsider. Auditor is  qualified and…

Q: When the computed upper exception rate is greater than the tolerable exception rate, it is necessary…

A: When the CUER (i.e. computed upper exception rate) is greater than the TER (i.e. tolerable exception…

Q: Auditors must be aware of sampling risks because: A The risk of type 2 error due to increased…

A: The Type 2 error is failing to detect a material misstatement in the financial statements. Type 1…

Q: Discuss audit sampling for tests of details of balances and for tests of controls and substantive…

A: Audit sampling is the procedure applied to less than hundred percentage of the transactions under…

Q: An auditor who uses statistical sampling for attributes in testing internal controlsshould reduce…

A: Sampling: Sampling can be defined as the process under which small number of observations is taken…

Q: What steps should auditors take if during a compilation engagement they become aware that the…

A: Auditing:   Auditing is a gathering of information and evaluation of evidence as to report on the…

Q: In practice, auditors issue a significant number of modified audit opinions for departures from GAAP…

A: The given statement is True..... A qualified opinion is expressed when auditors issue a significant…

Q: 17 1. By providing reasonable level of assurance on audit reports on financial statements, the…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: When making a decision about the dollar amount in an account balance based on a sample, the audit…

A:

Q: In an environment that is highly automated, an auditor determines that it is not possible toreduce…

A:

Q: TRUE OR FALSE When sampling is used by an auditor, an element of uncertainty is present in the…

A: ‘’Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Which of the following statements is FALSE? A. Irregularities are intentional misrepresentations…

A: A. An accounting irregularity is an entry or statement that does not conform to the normal laws,…

Q: Which sentence below is true about audit risk:  A. Audit risk is the risk that a company may hire…

A: Auditing means the independent checking of company operation by outsider. Auditor is  qualified and…

Q: aterial misstatement exists when it does not exist     the risk that an auditor incorrectly…

A: Risk of incorrect rejection is defined as   the risk that the auditor concludes that a…

Q: Which of the following statements is incorrect?

A: In order to authenticate the financial statements which has been prepared by the company and in…

Q: d consider whendetermining the size of a sample. (d) Describe to what extent statistical sampling…

A: Auditing: It is the examination of books of accounts of the company with the view to represent a…

Q: Question 30 If the auditor plans to assess control risk at less than the maximum and rely on…

A: Introduction:- The auditor intends to evaluate audit risks at a reduced level than highest and…

Q: S1: Stratification in audit sampling enables the auditor to direct his efforts towards the items he…

A: solution concept stratification means method of dividing the data into different groups so that the…

Q: Which of the following is not a method that auditors use to control their exposure to sampling risk…

A: Sampling:   Sampling allows an individual to obtain the information about the population of…

Q: Applying substantive tests to the details of asset and liability accounts as of an interim date,…

A: SOLUTION- Substantive testing is an audit procedure that examines the financial statements and…

Q: Which of the following statements is correct about the reliability of audit evidence? a.…

A: Audit evidence means evidence or supportings that is obtained by auditor during the course of audit.…

Q: On the basis of audit evidence gathered and evaluated, an auditor decides to decrease the level of…

A: Answer: Option D. Decrease in the assessed control risk.

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: In audit sampling applications, sampling risk isa. A characteristic of statistical sampling…

A: Answer:   Option d

Q: TRUE OR FALSE When evaluating the results of specific items selected for testing, its effects must…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: s1: A stratified sample consist of sampling units selected without conscious bias. s2: All auditing…

A: Ans. While doing audit an auditor divides a whole population in small samples. These samples are…

Q: Which of the following statements is not true with respect to nonstatistical sampling?a. It cannot…

A: Sampling allows an individual to obtain the information about the population of interest in the…

Q: If inherent risk is high and a reasonable level of assurance has been gained from control testing,…

A: The inherent audit risk is a risk that exists due to any error or omissions in the financial…

Q: If the auditor concludes that audit sampling has not provided a reasonable basis for conclusions…

A: Audit sampling is an investigative technique in which a sample of fewer than 100% of the total items…

Q: Non-statistical sampling is commonly used in audit practice. Describe each of the four items…

A: Audit sampling is a method of investigation in which a sample of less than 100% of the total items…

Q: What is “tolerable misstatement”? How is this concept applied when auditors perform audit tests on a…

A: Tolerate misstatement is a term used in auditing that refers to the amount by which a financial…

Q: In using audit sampling for exception rates:     the auditor wants to know the most the exception…

A: The auditor is the person who conduct audit of the financial statements and who is responsible of…

Q: Which of the following is not a technique of collecting audit evidence? a. Analytical procedures. b.…

A: Audit Evidence It is the information collected by an auditor in order to make sure  the accuracy and…

Q: In an audit sampling application, an auditora. Performs procedures on all items in a balance and…

A: An Auditor takes sampling data to conclude his results.

Q: STATEMENT 1: Since audit sampling is an essential part of the audit process, each step in an audit…

A: Auditing means the independent checking of company operation by outsider. Auditor is a qualified and…

Q: Why is the audit team more concerned with controlling the exposure to the risk of overreliancethan…

A: Issuance of an unqualified record of financial statements due to the auditor's inability to correct…

Q: Which of the following statements describes why a properly designed and executedaudit may not detect…

A: Auditing: Auditing is the process by which assertions made by management about financial…

Q: 2. If an auditor finds any misstatements or deviations in planned procedures: a. the auditor should…

A: Misstatement: It implies to a difference in the way an amount has been reported, classified, and…

Q: State with reasons (in short) whether the following statements are correct or incorrect (a) The…

A: As per our protocol we provide solution to the first three sub-parts only in case of multiple…