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.

Q: Which of the following does NOT accurately describe detection risk? assessed as low when control…

A: The risk that the financial statements of an entity include material misstatements is referred to as…

Q: Jerry Tim is examining an important internal control in the audit of Langly Company. Inpast audits,…

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

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: • The Choose the answer from the menu in accordance to the question statement _--- method includes…

A: There are many two types of sampling approaches used when auditing the financial statement of the…

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: In using difference estimation, an auditor took a random sampleof 100 inventory items from a large…

A: Sampling Risk:   A sampling risk refers to the risk that can arise from the auditor’s conscious…

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: 9-13

A: When auditor considers that there would be an increase in the amount of mis-statement in the…

Q: STATEMENT 1: In an audit sampling application, detection risk arises from the uncertainties of…

A: Audit sampling is a process or procedure in which a sample of items are selected from the total…

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: When the auditor uses monetary unit statistical sampling to examine the totaldollar value of…

A: Auditor is the independent personnel who is responsible for checking the financial information and…

Q: What is the tolerable rate of deviation? How does the audit team use it when deciding whether torely…

A: Tolerable rate of deviation: Tolerable rate of deviation is the maximum rate of deviation is used by…

Q: Jerry Tim is examining an important internal control in the audit of Langly Company. Inpast audits,…

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

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

A:

Q: If the _______ is less than the _______, the audit team would conclude that the account balance is…

A: Misstatement: It can be defined as the variations between the actual financial statements being…

Q: High levels of assurance mean _______.     A. lower levels of non-sampling risk that the sample is…

A: High Level of Assurance: The greater the degree of assurance offered, the greater the amount of…

Q: Is nonstatistical sampling permitted under generally accepted auditing standards?

A: Non- statistical sampling means selection of a group to be tested which is based on the examiner's…

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: In determining the sample size for a test of controls, an auditor should consider the expected…

A: Audit is the process of checking and verifying the books of account of the business in order to…

Q: The audit team will choose to reduce the reliance on controls if the _____ is greater than the…

A: The audit team will choose to reduce the reliance on controls if the upper limit rate of deviation…

Q: An essential step in difference estimation is the comparisonof each computed confidence limit with…

A: Tolerable misstatement indicates that part of overall materiality which is allocated to each of the…

Q: To allocate the preliminary estimate of materiality to the accounts, the auditor might consider A.…

A: in order to plan the nature timining and extent of the audit procedure that is needed to perform the…

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: Which of the following components of the audit risk model is most closely associated with attributes…

A: Given: The association of sampling attributes with the components of the audit risk model.

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: 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: When Arthus Andersen audited Enron, they should have recognized an acceptable level of detection…

A: Detection risks are the risks that the auditor will fail to find the material misstatement when that…

Q: If the _______ exceeds the _______, the audit team would decide to rely on internal control as…

A: Audit is a procedure of cross checking the financial statements of a firm for a financial year…

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 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: 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 = $…

Q: Complete the statement.   The lower the risk of material misstatement,    a.   the greater the…

A: The risk of material misstatement represents the risk of misleading statements involved in the…

Q: The tolerable rate of deviation set by the auditor for tests of controls depends primarily on which…

A: The auditor should determine the maximum rate of deviations from the prescribed control that he…

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: If the sample evidence does not support the planned level of control risk, the audit team coulda.…

A: Auditing is done in order to determine that the financial statements are not materially misstated.

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 major stages of the audit is most closely related to attributes sampling?a.…

A: Audit sampling is selection of items from a population of items for identifying and assessing the…

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.