Non-Statistical & Statistical Techniques
|Sampling Methods in Sales and Use Tax
Audits Questions and Answers Rated A+
What does Wisconsin law authorize regarding sales and use tax audits? - ANS-It
authorizes the Wisconsin Department of Revenue to use sampling.
What is the role of a Computer Audit Specialist (CAS) in sampling? - ANS-A CAS is
a department auditor trained in both auditing and statistics, involved in statistical
and some non-statistical samples.
What is defined as an 'Error' in the context of tax transactions? - ANS-An error is a
transaction where tax was not correctly paid, either being taxable and untaxed
(positive error) or nontaxable and taxed (negative error).
How is 'Net Error' calculated? - ANS-Net Error is the sum of all errors, where
negative errors are offset against positive errors.
What is the purpose of sampling in sales and use tax audits? - ANS-Sampling is
used to determine the accuracy of tax transactions and to project errors to the
sample population.
What are the two main types of sampling methods mentioned? - ANS-Statistical
and Non-Statistical methods.
What is an 'Alpha Sample'? - ANS-An Alpha Sample is a type of non-statistical
sampling method used in audits.
What is a 'Time-Based Sample'? - ANS-A Time-Based Sample is a non-statistical
sampling method that selects transactions based on specific time periods.
What does 'Stratified Block Sample' refer to? - ANS-A Stratified Block Sample is a
non-statistical sampling method that divides the population into strata and samples
from each block.
What is a 'Systematic Sample'? - ANS-A Systematic Sample is a non-statistical
sampling method where every nth item is selected from a list.
What is the first step in the statistical sampling method? - ANS-Data Cleansing.
What is meant by 'Defining Sample Size'? - ANS-It refers to determining the
number of units to be included in the sample for statistical analysis.
What is a 'Difference Estimator'? - ANS-A statistical method used to estimate the
, difference between the sample results and the actual population.
What is a 'Two-sided 90% Confidence Interval'? - ANS-A statistical range that
estimates where the true population parameter lies with 90% certainty.
What are 'Precision Standards' in the context of sampling? - ANS-Criteria that
determine the acceptable level of accuracy for the sampling results.
What is one special situation in sampling regarding 'Missing Records'? - ANS-
Missing records can lead to inaccuracies in the sample results and may require
special consideration during audits.
What is 'Double Inclusion' in sampling? - ANS-Double Inclusion refers to a situation
where a transaction is counted more than once in the sample.
What does 'Law Changes' imply in the context of sampling? - ANS-It refers to how
changes in tax laws can affect the sampling methods and results.
What are the two options for claiming a refund mentioned? - ANS-Option 1: Claim
for Refund on Specific Basis; Option 2: Claim for Refund via Audit Sample.
What is the purpose of projecting sample results to other open years? - ANS-To
estimate potential errors and tax liabilities for other periods based on the sampled
data.
What is the significance of 'Completeness of Records' in audits? - ANS-It ensures
that all relevant transactions are accounted for, which is crucial for accurate
sampling.
What is the main focus of Publication 501? - ANS-It provides information on the
field audit process in Wisconsin.
What does 'Refining the Sample Population' involve? - ANS-It involves narrowing
down the sample to ensure it accurately represents the population being studied.
What is the importance of 'Reviewing Sampled Transactions'? - ANS-It is crucial for
verifying the accuracy of the sample and ensuring compliance with tax regulations.
What is non-statistical sampling? - ANS-A sampling method where a sample is
selected on a basis other than random selection, making results ineligible for
probability theory analysis.
What is a refund item? - ANS-A measure of tax paid in error on a transaction.
What is a sample population? - ANS-The entire set of sampling units from which a
sample will be drawn.
What is the definition of sampling according to the AICPA? - ANS-The selection and
|Sampling Methods in Sales and Use Tax
Audits Questions and Answers Rated A+
What does Wisconsin law authorize regarding sales and use tax audits? - ANS-It
authorizes the Wisconsin Department of Revenue to use sampling.
What is the role of a Computer Audit Specialist (CAS) in sampling? - ANS-A CAS is
a department auditor trained in both auditing and statistics, involved in statistical
and some non-statistical samples.
What is defined as an 'Error' in the context of tax transactions? - ANS-An error is a
transaction where tax was not correctly paid, either being taxable and untaxed
(positive error) or nontaxable and taxed (negative error).
How is 'Net Error' calculated? - ANS-Net Error is the sum of all errors, where
negative errors are offset against positive errors.
What is the purpose of sampling in sales and use tax audits? - ANS-Sampling is
used to determine the accuracy of tax transactions and to project errors to the
sample population.
What are the two main types of sampling methods mentioned? - ANS-Statistical
and Non-Statistical methods.
What is an 'Alpha Sample'? - ANS-An Alpha Sample is a type of non-statistical
sampling method used in audits.
What is a 'Time-Based Sample'? - ANS-A Time-Based Sample is a non-statistical
sampling method that selects transactions based on specific time periods.
What does 'Stratified Block Sample' refer to? - ANS-A Stratified Block Sample is a
non-statistical sampling method that divides the population into strata and samples
from each block.
What is a 'Systematic Sample'? - ANS-A Systematic Sample is a non-statistical
sampling method where every nth item is selected from a list.
What is the first step in the statistical sampling method? - ANS-Data Cleansing.
What is meant by 'Defining Sample Size'? - ANS-It refers to determining the
number of units to be included in the sample for statistical analysis.
What is a 'Difference Estimator'? - ANS-A statistical method used to estimate the
, difference between the sample results and the actual population.
What is a 'Two-sided 90% Confidence Interval'? - ANS-A statistical range that
estimates where the true population parameter lies with 90% certainty.
What are 'Precision Standards' in the context of sampling? - ANS-Criteria that
determine the acceptable level of accuracy for the sampling results.
What is one special situation in sampling regarding 'Missing Records'? - ANS-
Missing records can lead to inaccuracies in the sample results and may require
special consideration during audits.
What is 'Double Inclusion' in sampling? - ANS-Double Inclusion refers to a situation
where a transaction is counted more than once in the sample.
What does 'Law Changes' imply in the context of sampling? - ANS-It refers to how
changes in tax laws can affect the sampling methods and results.
What are the two options for claiming a refund mentioned? - ANS-Option 1: Claim
for Refund on Specific Basis; Option 2: Claim for Refund via Audit Sample.
What is the purpose of projecting sample results to other open years? - ANS-To
estimate potential errors and tax liabilities for other periods based on the sampled
data.
What is the significance of 'Completeness of Records' in audits? - ANS-It ensures
that all relevant transactions are accounted for, which is crucial for accurate
sampling.
What is the main focus of Publication 501? - ANS-It provides information on the
field audit process in Wisconsin.
What does 'Refining the Sample Population' involve? - ANS-It involves narrowing
down the sample to ensure it accurately represents the population being studied.
What is the importance of 'Reviewing Sampled Transactions'? - ANS-It is crucial for
verifying the accuracy of the sample and ensuring compliance with tax regulations.
What is non-statistical sampling? - ANS-A sampling method where a sample is
selected on a basis other than random selection, making results ineligible for
probability theory analysis.
What is a refund item? - ANS-A measure of tax paid in error on a transaction.
What is a sample population? - ANS-The entire set of sampling units from which a
sample will be drawn.
What is the definition of sampling according to the AICPA? - ANS-The selection and
