ACP AUDITING - RISK BASED APPROACH
10th Edition
ISBN: 9780357195079
Author: JOHNSTONE
Publisher: CENGAGE C
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Question
Chapter 8, Problem 9TFQ
To determine
Introduction:
A misstatement is a difference between actual financial data and actual financial reporting data expected for a fair presentation as per the accounting rules.
Factual misstatements are the misstatements for which the auditor has no doubt. For example, there is a breach of an IFRS requirement. It means that if a required disclosure is missing, the financial statements are considered incorrect. An example of such non-disclosure includes EPS of a listed company.
To choose: Whether the statement is true or false.
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Students have asked these similar questions
Which of the following is the exception rate that the auditor expects to find before testing?
Sample exception rate
Estimated population exception rate
Computed exception rate
Tolerable exception rate
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
Auditors project the misstatements found in the sample tothe population when using statistical sampling, but not when usingnonstatistical sampling.
TRUE OR FALSE? WHY?
Chapter 8 Solutions
ACP AUDITING - RISK BASED APPROACH
Ch. 8 - Prob. 1TFQCh. 8 - Prob. 2TFQCh. 8 - Prob. 3TFQCh. 8 - Prob. 4TFQCh. 8 - Prob. 5TFQCh. 8 - Prob. 6TFQCh. 8 - Prob. 7TFQCh. 8 - Prob. 8TFQCh. 8 - Prob. 9TFQCh. 8 - Prob. 10TFQ
Ch. 8 - Prob. 11TFQCh. 8 - Prob. 12TFQCh. 8 - Prob. 13TFQCh. 8 - Prob. 14TFQCh. 8 - Prob. 15MCQCh. 8 - Prob. 16MCQCh. 8 - Prob. 17MCQCh. 8 - Prob. 18MCQCh. 8 - Prob. 19MCQCh. 8 - Prob. 20MCQCh. 8 - Prob. 21MCQCh. 8 - Refer to Exhibit 8.6. Assume a 5% risk of...Ch. 8 - Prob. 23MCQCh. 8 - Prob. 24MCQCh. 8 - Prob. 25MCQCh. 8 - Prob. 26MCQCh. 8 - Prob. 27MCQCh. 8 - Prob. 28MCQCh. 8 - Prob. 29RSCQCh. 8 - Prob. 30RSCQCh. 8 - Prob. 31RSCQCh. 8 - Prob. 32RSCQCh. 8 - Prob. 33RSCQCh. 8 - Prob. 34RSCQCh. 8 - Prob. 35RSCQCh. 8 - Prob. 36RSCQCh. 8 - Prob. 37RSCQCh. 8 - Prob. 38RSCQCh. 8 - Prob. 39RSCQCh. 8 - Prob. 40RSCQCh. 8 - Prob. 41RSCQCh. 8 - Prob. 42RSCQCh. 8 - Prob. 43RSCQCh. 8 - Prob. 44RSCQCh. 8 - Prob. 45RSCQCh. 8 - Prob. 46RSCQCh. 8 - Prob. 47RSCQCh. 8 - What is stratification? Distinguish between...Ch. 8 - Prob. 49RSCQCh. 8 - Prob. 50RSCQCh. 8 - Prob. 51RSCQCh. 8 - Prob. 52RSCQCh. 8 - Prob. 53RSCQCh. 8 - Prob. 54RSCQCh. 8 - Prob. 55RSCQCh. 8 - Prob. 56RSCQCh. 8 - Prob. 57RSCQCh. 8 - Prob. 58RSCQCh. 8 - Prob. 59RSCQCh. 8 - Prob. 60RSCQCh. 8 - Prob. 61RSCQCh. 8 - Prob. 62RSCQCh. 8 - Prob. 63RSCQ
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Similar questions
- Which 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 abovearrow_forwardIn auditing, can anyone who uses sampling such as statistical and non-statistical sampling be absolutely sure that the sample is representative of the population from which it is drawn? Please provide references if any.arrow_forwardSubject: Auditing & Assurance Principles Define the following factors that affect the determination of sample size: a) Acceptable sampling risk b) Tolerable deviation rate c) Expected deviation rate d) Tolerable misstatement e) Expected misstatement f) Variation in the populationarrow_forward
- (c)Describe the factors which theauditor should consider whendetermining the size of a sample. (d) Describe to what extent statistical sampling enhances the quality of the audit evidence. (e) Explain how judgementis used in statistical and non-statistical sampling.arrow_forwardIn evaluating the results of audit sampling in test of details which sentence below is FALSE? A. When the projected misstatement plus anomalous misstatement exceeds tolerable misstatement, the sample does not provide a reasonable basis for conclusions about the population that has been tested. B. he auditor's best estimate of the misstatement of the population is the projected misstatement minus anomalous misstatement. C. The closer the projected misstatement plus anomalous misstatement is to tolerable misstatement, the more likely that actual misstatement in the population may exceed tolerable misstatement. D. The auditor's best estimate of the misstatement of the population is the projected misstatement plus anomalous misstatement.arrow_forwardWhen evaluating the results of an MUS application, the audit team should compare the upper limit on misstatements to thea. Expected misstatement.b. Incremental allowance for sampling risk.c. Projected misstatement.d. Tolerable misstatement.arrow_forward
- 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.arrow_forwardIn determining the sample size for a test of controls, an auditor should consider the expected deviation rate, desired confidence level, and the * O Nature and cause of deviations O Population size O Risk of incorrect acceptance O Tolerable deviation ratearrow_forwardWhen using sampling in the study of internal control, the audit team would compare theupper limit rate of deviation to thea. Expected population deviation rate.b. Sample rate of deviation.c. Statistical rate of deviation.d. Tolerable rate of deviationarrow_forward
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