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BUS 404 Exam 2 Questions And Verified Detailed Answers
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BUS 404 Exam 2 Questions And Verified Detailed AnswersAn advantage of using statistical over nonstatistical sampling methods in tests of
controls is that the statistical methods - Answer provide an objective basis for
quantitatively evaluating sample risk
an advantage of statistical sampling over non-statistical sampling is that statistical
sampling helps an auditor to - Answer measure the sufficiency of the evidential matter
obtained
the risk of assessing control risk too high is the risk that the sample selected to test
controls. - Answer does NOT support the auditor's planned assessed level of control
risk when the true operating effectiveness of the control structure justifies such an
assessment
the risk of incorrect acceptance and the likelihood of assessing control risk too low
relate to the. - Answer effectiveness of the audit
Concept of sampling risk example - Answer an arbitrarily selected sample may NOT be
representative of the population as a whole on the characteristic of interest
in assessing sampling risk, the risk of incorrect rejection and the risk of assessing
control risk too high relate to the. - Answer efficiency of the audit
During an audit, an auditor performed a test of details and concluded from sample
results that the recorded account balance was materially misstated when, in fact, the
recorded account balance was not materially misstated. It is known as the risk of.-
Incorrect rejection
the expected population deviation rate of client billing errors is 3%. The auditor has
established a tolerable rate of 5%. In the review of client invoices the client should use. -
Answer attribute sampling
, Sampling method used to estimate a numerical measurement of a population, such as a
dollar value - Answer variables sampling
Audit test that an auditor would most likely use attribute sampling for - Answer
inspecting employee time cards for proper approval by supervisors
An underlying feature of random-based selection of items is that each. - Answer item in
the accounting population should have an opportunity to be selected
When conducting a test of control related to control over cash receipts, an auditor may
employ a systematic sampling method that starts at any arbitrary selected item. The
major problem with this type of sampling is that items within the population. - Answer
May occur in a pattern that is systematic, hence the sample randomness is destroyed
because of test controls, an auditor assessed control risk too low and reduced
substantive testing. this assessment occurred because the true deviation rate in the
population was. - Answer More than the deviation rate in the auditor's sample
factors to be considered in determining the sample size for a test of controls - Answer
expected deviation rate and tolerable deviation rate
statistical sampling in test of controls - The sample size is inversely related to the
tolerable rate
in determining the sample size for a test of controls, an auditor should consider the
likely rate of deviations, the allowable risk of assessing control risk too low, and the. -
Answer tolerable deviation rate
Procedure concerning accounts receivable that an auditor most likely would perform in
order to obtain evidence in support of an assessed level of control risk below maximum.
O - Observe preparation of entity's employee of the schedule of past due accounts
receivable
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