Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 17, Problem 24.3MCQ
To determine
Identify the projected error.
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K
Conduct a test at the α = 0.05 level of significance by determining (a) the null and alternative hypotheses, (b) the test statistic, and (c) the P-value. Assume the samples were obtained independently
from a large population using simple random sampling.
Test whether p₁> P2. The sample data are x₁ = 116, n₁ = 244, x2 = 132, and n₂ = 313.
(a) Choose the correct null and alternative hypotheses below.
OA. Ho P1 P2 versus H₁: P1 P2
OB. Ho P₁ P2 versus H₁: P₁ P2
OD. Ho p₁ =0 versus H₁:.p₁ #0
(b) Determine the test statistic.
Zo=
(Round to two decimal places as needed.)
(c) Determine the P-value.
The P-value is
(Round to three decimal places as needed.)
What is the result of this hypothesis test?
OA. Do not reject the null hypothesis because there is not sufficient evidence to conclude that p₁ #p2-
OB. Do not reject the null hypothesis because there is not sufficient evidence to conclude that p₁ P2-
OD. Reject the null hypothesis because there is sufficient evidence to conclude that p₁…
The standard deviation of.alt=”f$ar{X},f$ “> is usually called the
A.standard error of the sample
B.randomized standard error
C.standard error of the mean
D.standard error of the population
S1: 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 TRUE
Chapter 17 Solutions
Auditing And Assurance Services
Ch. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 8RQCh. 17 - Prob. 9RQCh. 17 - Prob. 10RQ
Ch. 17 - Prob. 11RQCh. 17 - Prob. 12RQCh. 17 - Prob. 13RQCh. 17 - Prob. 14RQCh. 17 - Prob. 15RQCh. 17 - Prob. 16RQCh. 17 - Prob. 17RQCh. 17 - Prob. 18RQCh. 17 - Prob. 19RQCh. 17 - Prob. 20RQCh. 17 - Prob. 21.1MCQCh. 17 - Prob. 21.2MCQCh. 17 - Prob. 21.3MCQCh. 17 - Prob. 22.1MCQCh. 17 - Prob. 22.2MCQCh. 17 - Prob. 22.3MCQCh. 17 - Prob. 23.1MCQCh. 17 - Prob. 23.2MCQCh. 17 - Prob. 23.3MCQCh. 17 - Prob. 24.1MCQCh. 17 - Prob. 24.2MCQCh. 17 - Prob. 24.3MCQCh. 17 - Prob. 25DQPCh. 17 - Prob. 26DQPCh. 17 - Prob. 27DQPCh. 17 - Prob. 28DQPCh. 17 - Prob. 29DQPCh. 17 - Prob. 30DQPCh. 17 - Prob. 31DQPCh. 17 - Prob. 32DQPCh. 17 - Prob. 34DQPCh. 17 - Prob. 35DQP
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- Review each of the following independent sets of conditions. For each condition, calculatethe (1) sample rate of deviation, (2) ULRD, and (3) allowance for sampling risk (n = samplesize, d = deviations, ROO = risk of overreliance). What is your conclusion regarding therelationship of each of these factors to the ULRD based on comparing the ULRD across different combinations of these factors?a. n = 100, d = 8, ROO = 5%.b. n = 100, d = 4, ROO = 5%.c. n = 100, d = 8, ROO = 10%arrow_forward1. Which of the following would be designed to estimate a numerical measurement of a population, such as monetary value?* A. Sampling for variables B. Sampling for attributes C. Sequential sampling D. Discovery sampling E. None of themarrow_forwardWhich of the following would be an appropriate null hypothesis? A. The mean of a population is equal to 55. B. The mean of a sample is equal to 55. OC. The mean of a population is greater than 55. OD. Only (a) and (c) are true. Question 2 of 13 Which of the following would be an appropriate alternative hypothesis? A. The mean of a population is equal to 55. OB. The mean of a sample is equal to 55. OC. The mean of a population is greater than 55. D. The mean of a sample is greater than 55. 0.2arrow_forward
- Other factors equal when planning a monetary unit sample, which of the following is true regarding the maximum tolerable misstatement (M)? a. M is based on the sample results. b. the larger M is, the lower the confidence. c. the larger M is, the smaller the sample. d. the larger the expected misstatement, the smaller M is.arrow_forwardThe sample size of a test of controls varies inversely with: Expected Population Tolerable deviation rate Rate A. Yes Yes B. No No C. Yes No D. No Yesarrow_forwardThe distance from the sample estimate that has a certain likelihood (equal to reliability) ofincluding the true population value is known as thea. Confidence.b. Mean.c. Precision.d. Precision interval.arrow_forward
- Suppose that you are given a decision situation with three possible states of nature: s1, s2, and s3. The prior probabilities are P(s1) = 0.2, P(s2) = 0.5, and P(s3) = 0.3. With sample information I, P(I|s1) = 0.1, P(I|s2) = 0.05, and P(I|s3) = 0.2. Compute the revised (or posterior) probabilities: P(s1|I), P(s2|I), and P(s3|I).arrow_forward3. Sample results may not be truly representative of a population due to * A. Sampling risks B. Sampling error C. Nonsampling error D. Standard deviation E. All of themarrow_forwardWhich of the following statements is correct about monetary unit sampling?a. The risk of incorrect acceptance must be specified.b. Smaller logical units have a higher probability of selection in the sample than larger units.c. Each logical unit in the population has an equally likely chance of being selected in the sample.d. The projected misstatement cannot be calculated when one or more misstatements are discovered.arrow_forward
- The likelihood that an identified precision interval contains the true (but unknown) population value is thea. Confidence.b. Mean.c. Precision.d. Sampling riskarrow_forwardWhich of the following combinations results in an increase in sample size in an attribute sample? a. Allowable Risk of Overreliance Tolerable Rate Expected Population Deviation Rate Decrease Decrease Increase b. Allowable Risk of Overreliance Tolerable Rate Expected Population Deviation Rate Decrease Increase Decrease c. Allowable Risk of Overreliance Tolerable Rate Expected Population Deviation Rate Increase Increase Decrease d. Allowable Risk of Overreliance Tolerable Rate Expected Population Deviation Rate Increase Increase Increase e. Allowable Risk of Overreliance Tolerable Rate Expected Population Deviation Rate Increase Decrease Increasearrow_forwardThestandard error of the mean is equal to:a.the sample variance divided by the sample size.b.the sample standard deviation divided by the square root of the samplesize.c.the sample variance divided by the square root of the sample size.d.twice the square root of the sample size.e.twice the square root of the sample variance.arrow_forward
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