FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
The more assurance the auditor wants, _______.
A. |
the less representative a sample should be of the population, and the more testing the auditor needs to do |
|
B. |
the more representative a sample should be of the population, but the less testing the auditor needs to do to gain efficiency |
|
C. |
the more representative a sample should be of the population, and the more testing the auditor needs to do |
|
D. |
the less representative a sample should be of the population, and the less testing the auditor needs to do |
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- In determining the tolerable deviation rate for a test of controls, the auditors consider: Their planned assessed level of control risk. The sample size. The nature of the test. The expected deviation rate in the population.arrow_forwardWhich 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.arrow_forwardThe two types of sampling risks that 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 is considered the more important risk?arrow_forward
- If there is a detection of one control deviation, the auditor can do which of the following? a. Increase the sample size O b. Test a compensation control Oc. Amend the auditor's decision to rely on the control O d. All of the above are options for an auditor responding to detection of a control deviaticarrow_forwardS1: Mean per unit estimation is a classical variable sampling technique that projects the sample average to the total population by multiplying the sample average by the number of items in the population. S2: The more the auditor is relying on other substantive procedures to reduce to an acceptable level the detection risk regarding a particular population, the less assurance the auditor will require from sampling, and the smaller the sample size can be. a. BOTH STATEMENTS ARE TRUE b. BOTH STATEMENTS ARE FALSE c. ONLY S1 IS TRUE d. ONLY S2 IS TRUEarrow_forward1a) Briefly discuss the advantages of using statistical sampling in auditing. 1b) Discuss three types of statistical sampling techniques.arrow_forward
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