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1 | |
Monetary-unit-sampling [MUS] is less efficient and generally not used if: |
| | A) | The auditor's objective is oriented towards understatements |
| | B) | Computerized system account balances are being audited |
| | C) | The account contains a large book value and a large number of transactions |
| | D) | Statistical conclusions are to be made relating to the sample |
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2 | |
An auditor may decide to increase the risk of incorrect rejection when |
| | A) | Increased reliability based on the sample is desired. |
| | B) | Many differences (audit value minus recorded value) are expected. |
| | C) | The initial sample results do not support the planned level of control risk. |
| | D) | The cost and effort of selecting additional sample items are low. |
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3 | |
When planning a sample for a substantive test of details, an auditor should consider the tolerable misstatement for the sample. This consideration should: |
| | A) | Be related to engagement risk. |
| | B) | Not be adjusted for qualitative factors. |
| | C) | Be related to preliminary judgments about materiality levels. |
| | D) | Not be adjusted during the audit process. |
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4 | |
In assessing sampling risk, the risk of incorrect rejection relates to the |
| | A) | Efficiency of the audit. |
| | B) | Effectiveness of the audit. |
| | C) | Selection of the sample. |
| | D) | Audit quality controls. |
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5 | |
Which of the following is true with regard to the auditor's determination of tolerable misstatement in statistical sampling of tests of balances? |
| | A) | It is directly related to sample size |
| | B) | It is inversely related to preliminary levels of materiality |
| | C) | The likelihood that an auditor will conclude that the book value of a population being sampled is fairly stated increases as the tolerable misstatement increases. |
| | D) | It is generally lower than expected misstatement |
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6 | |
An account balance is $2,250,000 and there are 55 items in the account, ten of which have balances that equal or exceed $75,000. The auditor plans to use a monetary-unit sampling plan with systematic sample selection. To ensure that all accounts with balances of at least $75,000 are selected, the minimum sample size should be: |
| | A) | 10. |
| | B) | 20. |
| | C) | 30. |
| | D) | 50. |
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7 | |
In monetary-unit sampling, the sampling interval is |
| | A) | The same as sample size. |
| | B) | Equal to the number of items in the account. |
| | C) | Population size divided by sample size. |
| | D) | The standard deviation of the items in the account. |
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8 | |
In a probability-proportional-to-size sample with a sampling interval of $10,000, an auditor discovered that a selected account receivable with a recorded amount of $5,000 had an audited amount of $4,000. If this were the only misstatement discovered by the auditor, the projected misstatement of this sample would be |
| | A) | $1,000. |
| | B) | $2,000. |
| | C) | $5,000. |
| | D) | $10,000. |
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9 | |
Which of the following statements is true regarding audit sampling? |
| | A) | Audit firms are increasingly utilizing non-statistical sampling plans using their own proprietary software. |
| | B) | Audit firms are increasingly utilizing non-statistical sampling plans using EXCEL and other commercially developed software. |
| | C) | Audit firms are increasingly utilizing statistical sampling plans using their own proprietary software. |
| | D) | Audit firms are increasingly utilizing statistical sampling plans using their EXCEL and other commercially developed software. |
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10 | |
Which of the following is considered one of the main advantages of classical variables sampling over monetary-unit sampling? |
| | A) | Any amount that is individually significant is automatically identified and selected. |
| | B) | Auditors rarely need the assistance of computer software to design and carry out an effective sampling plan. |
| | C) | Inclusion of zero and negative balances generally do not require special sampling considerations. |
| | D) | An understanding of standard deviation and normal distribution theory is not necessary. |
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11 | |
An auditor is determining the sample size for an inventory observation using mean-per-unit estimation [classical variables sampling]. To calculate the required sample size, the auditor usually determines the Variability in the Dollar Risk of Incorrect |
| | A) | Amounts of Inventory Items: Yes; Acceptance: Yes |
| | B) | Amounts of Inventory Items: Yes; Acceptance: No |
| | C) | Amounts of Inventory Items: No; Acceptance: Yes |
| | D) | Amounts of Inventory Items: No; Acceptance: No |
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