Number of Times Total Number of Day Worker Idle Observations Monday 17 44 Tuesday 18 56 Wednesday 14 48 Thursday 16 60

The two types of sampling risks auditors face include the risk of incorrect acceptance and the risk of incorrect rejection. What do each of these mean and how will each impact the audit process and the audit results?

Which of the following statements about attribute sampling is correct?   A. Larger transactions have a higher chance of being selected into the sample than smaller transactions.   B. The risk of over-reliance does not affect the sample size.   C. Attribute sampling is often used in the test of controls.   D. The haphazard selection method is often used for attribute sampling.   E. If the estimated population deviation rate is higher than the tolerable deviation rate, auditors conclude the internal control is effective.

Complete the statement.   The lower the risk of material misstatement,    a.   the greater the maximum tolerable misstatement   b. the higher the audit risk required.   c.   the later in the year that principal audit test procedures are performed   d.  the smaller the sample size needed for substantive testing