Question 1

A random sample for tests of controls is a sample

Accepted Answer

A)  that is representative of the population
B)  large enough to reduce sampling error to an acceptable level
C)  that includes a monetary amount in the item selected
D)  that will be subject to the internal control system of the client
E)  where every item in the population has an equal chance of selectionF) both A and CG) both A and EH) both B and DI) E) and F)
J) B) and C)

Question 2

For an internal control test,the auditor performs the audit procedure to determine whether the sample items contain

Accepted Answer

A)  deviations from the asserted control
B)  deviations from the documented control
C)  exceptions to the documented control
D)  exceptions to the asserted controlE) C) and D)
F) A) and B)

Question 3

If evidence of the control can be observed by the auditor

Accepted Answer

A)  the control is preventing or detecting misstatements in the financial statements
B)  the control has the ability to prevent or detect misstatements in the financial statements
C)  this is not sufficient to determine if the control is preventing or detecting misstatements in the financial statements
D)  this is not sufficient to determine if the control has the ability to prevent or detect misstatements in the financial statementsE) B) and D)
F) B) and C)

Question 4

Sequential sampling might be used to reduce sample size in a situation where the auditor

Accepted Answer

A)  believes the risk of overreliance is low
B)  believes the risk of overreliance is high
C)  believes the population has a low deviation rate
D)  believes the population has a high deviation rateE) A) and D)
F) None of the above

Question 5

Systematic random sampling can only be used when

Accepted Answer

A)  internal controls are present
B)  the sampling units are prenumbered
C)  internal controls are operating
D)  random sampling can be used under any circumstancesE) A) and C)
F) C) and D)

Question 6

The auditor uses professional judgment to estimate

Accepted Answer

A)  the risk of overreliance
B)  the sample interval
C)  the desired control risk
D)  the expected deviation rate
E)  the actual deviation rateF) both A and DG) both B and CH) both D and EI) C) and D)
J) F) and G)

Question 7

The risk of assessing control risk too low is

Accepted Answer

A)  an error that will affect the efficiency of the audit
B)  an error that will affect the effectiveness of the audit
C)  an error that will affect the reliability of the audit
D)  an error that will affect the relevance of the auditE) B) and C)
F) None of the above

Question 8

The risk of assessing control risk too high is

Accepted Answer

A)  an error that will affect the efficiency of the audit
B)  an error that will affect the effectiveness of the audit
C)  an error that will affect the reliability of the audit
D)  an error that will affect the relevance of the auditE) A) and C)
F) B) and D)

Question 9

Audit samples for tests of controls may be designed using a fixed sampling plan or a sequential sampling plan.

Accepted Answer

A) True 
 B)False

Question 10

The most important points to understand about gathering evidence based on sampling procedures are:

Accepted Answer

A)  when to use a sample to confirm evidence
B)  how to generate a random sample for the test
C)  how to validate the audit test
D)  how to evaluate the deviations found in the sample
E)  how to use the sample results to arrive at an assumption about the populationF) both A and CG) both A and EH) both B and DI) B) and G)
J) B) and D)

Question 11

A sequential sampling plan usually consists of two to four groups.Once the auditor has considered control deviations in the first group of sampling units,he decides whether to

Accepted Answer

A)  accept the assessed level of inherent risk as planned,without examining additional sampling units
B)  stop sampling because the tolerable rate of deviation cannot be achieved
C)  examine additional sampling units because sufficient information to support the assessed level of control risk has not been found
D)  sample additional units until the tolerable rate of deviation is achieved
E)  examine additional sampling units because sufficient information to support the actual level of control risk has not been foundF) both A and CG) both B and CH) both D and EI) C) and E)
J) E) and F)

Question 12

The auditor may decide to stop internal control testing if

Accepted Answer

A)  the items sampled indicate a lower rate of deviation than planned
B)  the items sampled indicate a lower precision rate than planned
C)  the items sampled indicate a higher rate of deviation than planned
D)  the items sampled indicate a higher precision rate than plannedE) All of the above
F) C) and D)

Question 13

The auditing standards require

Accepted Answer

A)  the auditor to list the specific items sampled in the work papers or to describe the sampling method in such a way that another auditor could go back and arrive at the same sample results
B)  the auditor to list the specific results obtained in the work papers or to describe the sampling method in such a way that another auditor could go back and pull the same sample
C)  the auditor to list the specific results obtained in the work papers or to describe the sampling method in such a way that another auditor could go back and arrive at the same sample results
D)  the auditor to list the specific items sampled in the work papers or to describe the sampling method in such a way that another auditor could go back and pull the same sampleE) A) and B)
F) B) and C)

Question 14

The auditor uses professional judgment to estimate

Accepted Answer

A)  the risk of underreliance
B)  the sample interval
C)  the desired control risk
D)  the expected deviation rate
E)  the actual deviation rateF) A) and E)
G) All of the above

Question 15

Auditors control nonsampling risk for nonstatistical sampling by

Accepted Answer

A)  quantifying the risk
B)  planning and supervising employees
C)  performing analytical procedures
D)  performing tests of controlsE) None of the above
F) A) and D)

Question 16

The purpose of internal control testing is to gather evidence about

Accepted Answer

A)  internal controls over financial statements
B)  internal controls over financial reporting
C)  the operating effectiveness of the control
D)  whether the control has been placed in operationE) All of the above
F) A) and B)

Question 17

Sampling risk

Accepted Answer

A)  can be estimated when the auditor uses statistical sampling
B)  can be calculated when the auditor uses statistical sampling
C)  can be assumed when the auditor uses statistical sampling
D)  can be reduced when the auditor uses statistical sampling
E)  can be calculated when the auditor uses nonstatistical samplingF) All of the above
G) B) and E)

Question 18

Describe how the test of control procedure was performed.

Accepted Answer

The auditor performs the audit procedure...

Question 19

Statistical sampling and nonstatistical sampling refer

Accepted Answer

A)  to the sample selection procedure
B)  to the sample selection method
C)  to the way the auditor obtains the sample items
D)  to the way the auditor evaluates the sample results
E)  to the way the auditor obtains the sample resultsF) both A and CG) both A and EH) Both B and DI) B) and E)
J) B) and C)

Question 20

Which of the following statements is a correct statement about haphazard sampling?

Accepted Answer

A)  the sample is selected without any bias.
B)  haphazard sampling can be used for either statistical or non-statistical sampling.
C)  haphazard sampling may be used when items in the population are not prenumbered documents.
D)  haphazard sampling must be used when items in the population are not prenumbered documents.
E)  haphazard sampling can only be used for non-statistical sampling.F) both A and BG) both A and EH) Both D and EI) B) and G)
J) A) and E)

Exam 8: Audit Sampling: Tests of Internal Controls

The risk of assessing control risk too high is

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The purpose of internal control testing is to gather evidence about

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A random sample for tests of controls is a sample

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Auditors control nonsampling risk for nonstatistical sampling by

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Which of the following statements is a correct statement about haphazard sampling?

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The auditor uses professional judgment to estimate

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If evidence of the control can be observed by the auditor

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A sequential sampling plan usually consists of two to four groups.Once the auditor has considered control deviations in the first group of sampling units,he decides whether to

Correct AnswerverifiedShow Answer

The auditing standards require

Correct AnswerverifiedShow Answer

Describe how the test of control procedure was performed.

Correct AnswerverifiedThe auditor performs the audit procedure...View AnswerShow Answer

Sequential sampling might be used to reduce sample size in a situation where the auditor

Correct AnswerverifiedShow Answer

The most important points to understand about gathering evidence based on sampling procedures are:

Correct AnswerverifiedShow Answer

Sampling risk

Correct AnswerverifiedShow Answer

For an internal control test,the auditor performs the audit procedure to determine whether the sample items contain

Correct AnswerverifiedShow Answer

The auditor uses professional judgment to estimate

Correct AnswerverifiedShow Answer

Statistical sampling and nonstatistical sampling refer

Correct AnswerverifiedShow Answer

Audit samples for tests of controls may be designed using a fixed sampling plan or a sequential sampling plan.

Correct AnswerverifiedShow Answer

The risk of assessing control risk too low is

Correct AnswerverifiedShow Answer

Systematic random sampling can only be used when

Correct AnswerverifiedShow Answer

The auditor may decide to stop internal control testing if

Correct AnswerverifiedShow Answer

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The auditor performs the audit procedure...
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