SB EF .1

Which of the following statements is correct?

Audit teams generally do not give major consideration to population size in determining sample size.

The likelihood that the decision made based on the sample differs from the decision that would have been made if the entire population had been examined is .

Blank 1: sampling Blank 2: risk

Factors that influence the sample size in an MUS application include both

Blank 1: tolerable Blank 2: expected

The maximum amount an account balance or class of transactions can be misstated without the audit team's requiring an adjustment to prevent a qualified or adverse opinion is the level of

Blank 1: tolerable Blank 2: misstatement

The amount at which an account should be recorded if no misstatements exist is referred to as the .

Blank 1: true Blank 2: balance

There are two types of sampling risks for attributes sampling applications: the risk of and the risk of .

Blank 1: underreliance Blank 2: overreliance

The first step in the attributes sampling process is to ______.

identify the objective

The possibility that the opinion of a group of people contacted about a issue differs from opinions of the entire population is referred to as .

sampling risk

The main factors that influence the sample size in an MUS application are ______.

sampling risk tolerable misstatement population size expected misstatement

The physical representation of the population is the frame of reference the audit team uses in ______.

selecting the sample

When using MUS, the audit team normally selects sampling items using a(n) ______ selection method.

systematic random

(Recorded balance - audited value) ÷ Recorded balance is the calculation of the

tainting

The percentage by which the transaction is misstated is called the percentage.

tainting

The number of transactions or components of the account balance or class of transactions that are examined is dictated by the ______ risk.

tests of details

During the year under audit an entity made a total of 12,570 sales to 1,935 customers with a total recorded balance of $3.1 million. The year end accounts receivables balance was $1.9 million. The audit team has determined that the appropriate sample size is 1,190 items. The MUS sampling interval is ______.

$2,605

During the year under audit an entity made a total of 12,570 sales to 1,935 customers worth a total of $3.1 million. The year end accounts receivables balance was $1.9 million. The MUS population of interest when auditing accounts receivables equals ______ units.

3.1 million

The two types of sampling risk for variables sampling application are risk of incorrect

Blank 1: acceptance Blank 2: rejection

In variables sampling, the auditors want to determine the amount at which an item should be recorded, which is often referred to as the

Blank 1: audited Blank 2: value

The test of details risk is determined using the audit risk model and by considering inherent risk, risk and risk.

Blank 1: control Blank 2: analytical Blank 3: procedures

Auditors usually suspect some level of deviation in the client's internal control activities which is referred to as the deviation rate.

Blank 1: expected Blank 2: population

The two statistical approaches for variables sampling are sampling and variables sampling.

Blank 1: monetary Blank 2: unit Blank 3: classical

When defining the population, the audit team also needs to determine the of the population.

Blank 1: physical Blank 2: representation

It is suggested that there will be some expected population deviation rate under the concept of .

Blank 1: reasonable Blank 2: assurance

To select an MUS sample, the audit teams divides the population size by the sample size to calculate the

Blank 1: sampling Blank 2: interval

Which of the following is NOT a main factor influencing the sample size in an attributes sampling application?

Risk of underreliance

Which of the following statements are correct?

Stars of lower luminosity than the Sun are most common

When using MUS sampling, there is _____ relationship between population size and sample size.

a direct

Monetary unit sampling (MUS) is less effective when ______.

a relatively large number of misstatements is expected the completeness assertion is of greatest concern

The risk of overreliance results in ______ loss.

an effectiveness

Performing tests of controls to determine the operating effectiveness of internal control and assess control risk is done using

attributes

To determine the extent to which some characteristic exists within a population of interest, auditors use ______ sampling

attributes

To determine the extent to which some characteristic exists within a population of interest, auditors use sampling.

attributes

The risk that a material misstatement occurs, is not prevented or detected by the client's internal controls, and is not detected by the audit team's substantive procedures is the definition of risk.

audit

MUS ______.

can result in items being selected twice selects all transactions higher than the sampling interval may result in the actual number of logical units examined being smaller than the sample size

In attributes sampling, the characteristic of interest is a(n)

deviation

When using MUS sampling, there is a(n) relationship between population size and sample size.

direct

Prior experience with the client is ordinarily the basis for the audit team's estimate of

expected

The anticipated amount of misstatement in an account balance of class of transactions is referred to as the

expected

Monetary unit sampling (MUS) is a good choice when ______.

few or no misstatements are expected the existence assertion is of greatest concern

Controlling exposure to the risk of ______ is of primary importance to auditors

incorrect acceptance

Controlling exposure to the risk of ______ is of primary importance to auditors.

incorrect acceptance

Sample size varies ______ with sampling risk.

inversely

When using monetary unit sampling, an account balance recorded at $25,000 ______ an account balance recorded at $5,000.

is 5 times more likely to be selected than

In attributes sampling, the characteristic of interest ______.

is a deviation condition

Monetary unit sampling (MUS) ______.

is generally simpler to use than classical variables sampling typically include large dollar value transactions in samples is effective in identifying misstatements when overstatement is the primary concern

If a control is judged to be more important and would result in a more significant reduction in substantive testing, the tolerable rate of deviation is generally established at ______ levels.

lower

A deviation ______ indicate that an error in processing a transaction has occurred.

may or may not

The difference between the true balance and the recorded balance of an account is a(n) .

misstatement

Probability proportional to size selection is used with ______.

monetary unit sampling only

A group of people were contacted about an upcoming election. The group accurately revealed their preference that the current senator be re-elected and pollsters accurately recorded that preference. On election day, the current senator was defeated by her opponent. The major cause of this outcome is likely a(n) sample

nonrepresentative

A group of people were contacted about an upcoming election. The group accurately revealed their preference that the current senator be re-elected and pollsters accurately recorded that preference. On election day, the current senator was defeated by her opponent. The major cause of this outcome is likely a(n) sample.

nonrepresentative

The first step in the attributes sampling process is to determine the of attributes sampling.

objective

The appropriate risk of is based on the planned level of control risk.

overreliance

When determining sample size, auditors consider the risk of ______.

overreliance only

In an MUS application, the characteristic of interest is the difference between the audited value and the ______.

recorded value

Monetary unit sampling (MUS) ______.

requires special consideration for units having a zero or negative balance samples are difficult to expand when preliminary results indicate a material misstatement provides a higher estimate of misstatement as compared to classical variables sampling

After calculating performance materiality for the various account balances and classes of transactions, auditors normally estimate

tolerable

The maximum rate of deviations permissible by the audit team without modifying the planned assessed level of control risk is the rate of deviation.

tolerable

Performing substantive tests of details to provide the necessary level of detection risk and evaluate the fairness of an account balance or class of transactions is done using sampling.

variables

When the audit team wants to estimate the "true" balance or the misstatement of a particular account or class of transactions, sampling is used.

variables