Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Chapter 9, Problem 38OQ
To determine
Indicate whether the given statements are true or false and provide an explanation for the false statement.
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(Appendix G.B) To determine the sample size for a classical variables sampling application,an audit team should consider the tolerable misstatement, risk of incorrect acceptance, riskof incorrect rejection, population size, population variability, anda. Expected misstatement in the account.b. Overall materiality for the financial statements taken as a whole.c. Risk of assessing control risk too low.d. Risk of assessing control risk too high
The upper precision limit (CUER) in statistical sampling is(1) the percentage of items in a sample that possess a particular attribute.(2) the percentage of items in a population that possess a particular attribute.(3) a statistical measure, at a specified confidence level, of the maximum rate ofoccurrence of an attribute.(4) the maximum rate of exception that the auditor would be willing to accept inthe population without altering the planned reliance on the attribute.
s1: The only way to know with certainty whether a sample Is representative is to subsequently audit the entire population. s2: One way to control sampling risk is to increase the sample size. s3: Sampling risk results from the auditor's failure to recognize exceptions in transaction data.
A. all statements are true
b. all statements are false
c. s1 and s2 are true
d. s1 and s3 are true
Chapter 9 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 9 - Prob. 1RQCh. 9 - Prob. 2RQCh. 9 - Prob. 3RQCh. 9 - Prob. 4RQCh. 9 - Prob. 5RQCh. 9 - Prob. 6RQCh. 9 - Prob. 7RQCh. 9 - Prob. 8RQCh. 9 - Prob. 9RQCh. 9 - Prob. 10RQ
Ch. 9 - Prob. 11RQCh. 9 - Prob. 12RQCh. 9 - What is a dual-purpose test?Ch. 9 - Prob. 14RQCh. 9 - Prob. 15RQCh. 9 - Prob. 16RQCh. 9 - What would be the difference between an attributes...Ch. 9 - Prob. 18RQCh. 9 - Prob. 19RQCh. 9 - Prob. 20RQCh. 9 - Prob. 21RQCh. 9 - Prob. 22RQCh. 9 - Prob. 23RQCh. 9 - Prob. 24RQCh. 9 - Prob. 25RQCh. 9 - Prob. 26RQCh. 9 - Prob. 27RQCh. 9 - Prob. 28RQCh. 9 - Prob. 29QRACh. 9 - Prob. 30QRACh. 9 - Prob. 31QRACh. 9 - Prob. 32QRACh. 9 - Prob. 33QRACh. 9 - Prob. 34QRACh. 9 - Prob. 35QRACh. 9 - Prob. 36QRACh. 9 - Prob. 37AOQCh. 9 - Prob. 37BOQCh. 9 - Prob. 37COQCh. 9 - Prob. 37DOQCh. 9 - Prob. 37EOQCh. 9 - Prob. 37FOQCh. 9 - Prob. 37GOQCh. 9 - Prob. 37HOQCh. 9 - Prob. 37IOQCh. 9 - Prob. 37JOQCh. 9 - Prob. 37KOQCh. 9 - Prob. 37LOQCh. 9 - Prob. 38OQCh. 9 - Prob. 39OQCh. 9 - For each term in the first column below, identify...Ch. 9 - Prob. 41OQCh. 9 - Smith, Inc. Rachel Robertson wishes to use...Ch. 9 - Prob. 43OQCh. 9 - Prob. 44PCh. 9 - Prob. 45PCh. 9 - Prob. 46PCh. 9 - Prob. 47PCh. 9 - In the audit of Potomac Mills, the auditors wish...Ch. 9 - Prob. 49PCh. 9 - Prob. 50PCh. 9 - Prob. 51PCh. 9 - Prob. 52ITC
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Similar questions
- 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 TRUEarrow_forwardWhich of the following steps involved with determining the upper limit on misstatements is ordinarily performed earliest?a. Multiply the sampling interval by the tainting percentage.b. Determine the audited value of the item and compare it to the recorded balance.c. Calculate the basic allowance for sampling risk.d. Calculate the incremental allowance for sampling risk.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_forward
- On Andit sampling involves applying an audit procedure to less than 100 percent of the population for the purpose of evaluating some characteristic of the population. When an auditor uses sampling. an element of uncertainty enters into the auditor's conclusions. Required: a. Explain the auditor's justification for accepting the uncertainties that are inherent in the sampling process. b. Discuss the uncertainties that collectively embody the concept of audit risk. c. Discuss the nature of sampling risk and nonsampling risk. Include the effect of sampling risk on tests of controls in terms of Type I and Type II errors. Accessibility: Investigate Stylesarrow_forwardSelect the necessary words from the list of possibilities to complete the following statements. 1. 2. 7. Inherent in the use of sampling is representative of the population. 9. When the auditors estimate sampling risk using professional judgment rather than by using the laws of probability, they are said to be using. sampling. an item from the population may be selected two or more times for inclusion in the When using sample. The term 3. 4. 5. In performing tests of controls, the auditors are primarily concerned with the risk of assessing 6. To use attributes sampling tables, the auditors must stipulate the desired risk of assessing control risk too low, the expected deviation rate in the population, and the desired Statements risk which is the possibility of selecting a sample that i not refers to the process of dividing a population into relatively homogeneous subgroups. sampling is usually used in situations in which the auditors expect a very low rate of occurrence of some…arrow_forwards1: A stratified sample consist of sampling units selected without conscious bias. s2: All auditing procedures involve audit sampling. s3: A deviation from prescribed control procedures does not necessarily indicate the presence of monetary error A. all statements are true b. all statements are false c. s1 and s2 are true d. s1 and s3 are truearrow_forward
- Which 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_forwardThe unique feature of monetary unit sampling is thata. Sampling units are not chosen at random.b. A dollar unit selected in a sample is not replaced before the sample selection is completed.c. Auditors need not worry about the risk of incorrect acceptance decision.d. The population is defined as the number of monetary units in an account balance or class of transactions.arrow_forwardAudit sampling involves applying an audit procedure to less than 100 percent of the population for the purpose of evaluating some characteristic of the population. when an auditor uses sampling, an element of uncertainty enters into the auditor’s conclusions.Required:a. Explain the auditor’s justification for accepting the uncertainties that are inherent in the sampling process.b. Discuss the uncertainties that collectively embody the concept of audit risk.c. Discuss the nature of sampling risk and nonsampling risk. Include the effect of sampling risk on tests of controls.arrow_forward
- . STATEMENT 1: All auditing procedures involves audit sampling. STATEMENT 2: Sufficiency or adequacy of sample size is more "scientifically" measured with the use of statistical sampling approach. A. Only Statement 1 is incorrect B. Only Statement 1 is correct C. Both statements are incorrect D. Both statements are correctarrow_forwardSTATEMENT 1: If the sampling unit is defined as the individual disbursement entry in the check register, the sampling frame would be the check voucher and its supporting documents. A STATEMENT 2: Not all audit tests applied to less than 100% of the populatian are considered audit sampling applications. A. Only Statement 1 is incorrect B. Only Statement 1 is correct C. Both statements are incorrect D. Both statements are correctarrow_forwardWhen using monetary unit sampling, a population is accepted as being materially correct when the: Tolerable misstatement is greater than the upper limit on misstatement. Incremental allowance is less than the upper limit on misstatement. Projected misstatement is less than the upper limit on misstatement. Basic precision is greater than the projected misstatement.arrow_forward
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