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
