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Auditing and Assurance Services, 14e (Arens)
Chapter 15 Audit Sampling for Tests of Controls and
Substantive Tests of Transactions
Learning Objective 15-1
1)A sample in which the characteristics of the sample are the same as those of the
population is a(n): A) variables sample.
B) representative
sample. C) attributes
sample.
D) random
sample. Answer:
B
Terms: Sample in which characteristics of sample are same as population
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
2)When the auditor decides to select less than 100 percent of the population for
testing, the auditor is said to use:
A) audit sampling.
B) representative
sampling. C) poor
judgment.
D) estimation
sampling. Answer: A
Terms: Auditor selects less than 100 percent of population for testng
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
3)To determine if a sample is truly representative of the population, an auditor would
be required to: A) conduct multiple samples of the same population.
B) never use sampling because of the expense
involved. C) audit the entire population.
D) use systematic sample
selection. Answer: C
Terms: Sample truly representative of population
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
1
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4) One of the ways to eliminate nonsampling risk is
through: A) proper supervision and instruction of the
client's employees. B) proper supervision and instruction
of the audit team.
C) the use of attributes sampling rather than variables sampling.
D) controls which ensure that the sample drawn is random and
representative. Answer: B
Terms: Ways to eliminate nonsampling risk
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
5) Which one of the choices below is most correct regarding a cause of
sampling risk? A) ineffective use of audit procedures
B) testing less than the entire population
C) use of extensive tests of controls
D) the possibility that a properly-selected sample still may not be
representative Answer: B
Terms: Correct regarding sampling risk
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
6) An auditor can increase the likelihood that a sample is representative by using care in: A)
Designing the sampling process Designing the sample selection
Yes Yes
B)
Designing the sampling process Designing the sample selection
No No
C)
Designing the sampling process Designing the sample selection
Yes No
D)
Designing the sampling process Designing the sample selection
No Yes
Answer: A
Terms: Increase likelihood that sample is representatigve
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
2
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
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7) Which of the following is the risk that audit tests will not uncover existing
exceptions in a sample? A) Sampling risk
B) Nonsampling
risk C) Audit risk
D) Detection
risk Answer: B
Terms: Risk that audit tests will not uncover existing exceptions
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
8)Which of the following is the risk that an auditor will reach an incorrect conclusion
because a sample is not representative of the population?
A) Sampling risk
B) Nonsampling
risk C) Audit risk
D) Detection
risk Answer: A
Terms: Risk auditor will reach an incorrect conclusion
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
9)Sampling risk may be controlled by:
A)
Adjusting the sample size Always using random sampling
Yes Yes
B)
Adjusting the sample size Always using random sampling
No No
C)
Adjusting the sample size Always using random sampling
Yes No
D)
Adjusting the sample size Always using random sampling
No Yes
Answer: C
Terms: Sampling risk controlled by
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
3
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
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10) Which of the following statements is most correct?
A) A sample of all items of a population will eliminate sampling risk, but increase
nonsampling risk.
B)The use of an appropriate sample selection technique ensures a representative sample.
C) The auditor's failure to recognize an exception is a significant cause of sampling risk.
D) The use of inappropriate audit procedures is a significant cause of nonsampling risk.
Answer: D
Terms: Sample selection; Sampling and nonsampling risk
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
11) Which of the following statements best expresses the impact that the performance
of audit procedures has on statistical vs. nonstatistical sampling?
A) Audit procedures on the sample item will vary as a result of using either statistical or
nonstatistical sampling.
B) The audit procedures will be the same for either statistical or nonstatistical sampling
but they must be performed differently for each.
C) Statistical sampling requires quantitative audit procedures, whereas nonstatistical
sampling requires judgmental audit procedures.
D) Audit procedures on the sample item will not vary as a result of using either
statistical or nonstatistical sampling.
Answer: D
Terms: Statistical vs. nonstatistical sampling
Diff: Challenging
Objective: LO 15-1
AACSB: Reflective thinking skills
12) Briefly explain why auditors utilize audit sampling.
Answer: Auditors use sampling techniques primarily because it is generally impractical to
audit all transactions or balances. Consequently, auditors must design strategies to select
items from the population that are likely to be representative of the remaining unaudited
population items. In addition, auditors often use sampling techniques because of
economic realities. That is, clients generally do not want to incur the substantial fees
associated with auditing every transaction or balance.
Terms: Audit sampling
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
13) Discuss what is meant by "sampling risk" and "nonsampling risk".
Answer: Sampling risk occurs when the sample is not representative of the
population; that is, the characteristics of interest in the sample are not the same as
those in the population. Nonsampling risk occurs when audit tests do not uncover
existing exceptions in the sample.
Terms: Sampling and nonsampling risks
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
4
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
To downloaddownload moremore ebooks,ebooks, slides,slides, SMSM andand TBTB visit:visit: http://testbanklancerhtp:/testbanklancer..blogspotblogspot..comcom
Auditing and Assurance Services, 14e (Arens)
Chapter 15 Audit Sampling for Tests of Controls and
Substantive Tests of Transactions
Learning Objective 15-1
1)A sample in which the characteristics of the sample are the same as those of the
population is a(n): A) variables sample.
B) representative
sample. C) attributes
sample.
D) random
sample. Answer:
B
Terms: Sample in which characteristics of sample are same as population
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
2)When the auditor decides to select less than 100 percent of the population for
testing, the auditor is said to use:
A) audit sampling.
B) representative
sampling. C) poor
judgment.
D) estimation
sampling. Answer: A
Terms: Auditor selects less than 100 percent of population for testng
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
3)To determine if a sample is truly representative of the population, an auditor would
be required to: A) conduct multiple samples of the same population.
B) never use sampling because of the expense
involved. C) audit the entire population.
D) use systematic sample
selection. Answer: C
Terms: Sample truly representative of population
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
1
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
, To
To downloaddownload moremore ebooks,ebooks, slides,slides, SMSM andand TBTB visit:visit: http://testbanklancerhtp:/testbanklancer..blogspotblogspot..comcom
4) One of the ways to eliminate nonsampling risk is
through: A) proper supervision and instruction of the
client's employees. B) proper supervision and instruction
of the audit team.
C) the use of attributes sampling rather than variables sampling.
D) controls which ensure that the sample drawn is random and
representative. Answer: B
Terms: Ways to eliminate nonsampling risk
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
5) Which one of the choices below is most correct regarding a cause of
sampling risk? A) ineffective use of audit procedures
B) testing less than the entire population
C) use of extensive tests of controls
D) the possibility that a properly-selected sample still may not be
representative Answer: B
Terms: Correct regarding sampling risk
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
6) An auditor can increase the likelihood that a sample is representative by using care in: A)
Designing the sampling process Designing the sample selection
Yes Yes
B)
Designing the sampling process Designing the sample selection
No No
C)
Designing the sampling process Designing the sample selection
Yes No
D)
Designing the sampling process Designing the sample selection
No Yes
Answer: A
Terms: Increase likelihood that sample is representatigve
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
2
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
, To
To downloaddownload moremore ebooks,ebooks, slides,slides, SMSM andand TBTB visit:visit: http://testbanklancerhtp:/testbanklancer..blogspotblogspot..comcom
7) Which of the following is the risk that audit tests will not uncover existing
exceptions in a sample? A) Sampling risk
B) Nonsampling
risk C) Audit risk
D) Detection
risk Answer: B
Terms: Risk that audit tests will not uncover existing exceptions
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
8)Which of the following is the risk that an auditor will reach an incorrect conclusion
because a sample is not representative of the population?
A) Sampling risk
B) Nonsampling
risk C) Audit risk
D) Detection
risk Answer: A
Terms: Risk auditor will reach an incorrect conclusion
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
9)Sampling risk may be controlled by:
A)
Adjusting the sample size Always using random sampling
Yes Yes
B)
Adjusting the sample size Always using random sampling
No No
C)
Adjusting the sample size Always using random sampling
Yes No
D)
Adjusting the sample size Always using random sampling
No Yes
Answer: C
Terms: Sampling risk controlled by
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
3
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
, To
To downloaddownload moremore ebooks,ebooks, slides,slides, SMSM andand TBTB visit:visit: http://testbanklancerhtp:/testbanklancer..blogspotblogspot..comcom
10) Which of the following statements is most correct?
A) A sample of all items of a population will eliminate sampling risk, but increase
nonsampling risk.
B)The use of an appropriate sample selection technique ensures a representative sample.
C) The auditor's failure to recognize an exception is a significant cause of sampling risk.
D) The use of inappropriate audit procedures is a significant cause of nonsampling risk.
Answer: D
Terms: Sample selection; Sampling and nonsampling risk
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
11) Which of the following statements best expresses the impact that the performance
of audit procedures has on statistical vs. nonstatistical sampling?
A) Audit procedures on the sample item will vary as a result of using either statistical or
nonstatistical sampling.
B) The audit procedures will be the same for either statistical or nonstatistical sampling
but they must be performed differently for each.
C) Statistical sampling requires quantitative audit procedures, whereas nonstatistical
sampling requires judgmental audit procedures.
D) Audit procedures on the sample item will not vary as a result of using either
statistical or nonstatistical sampling.
Answer: D
Terms: Statistical vs. nonstatistical sampling
Diff: Challenging
Objective: LO 15-1
AACSB: Reflective thinking skills
12) Briefly explain why auditors utilize audit sampling.
Answer: Auditors use sampling techniques primarily because it is generally impractical to
audit all transactions or balances. Consequently, auditors must design strategies to select
items from the population that are likely to be representative of the remaining unaudited
population items. In addition, auditors often use sampling techniques because of
economic realities. That is, clients generally do not want to incur the substantial fees
associated with auditing every transaction or balance.
Terms: Audit sampling
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
13) Discuss what is meant by "sampling risk" and "nonsampling risk".
Answer: Sampling risk occurs when the sample is not representative of the
population; that is, the characteristics of interest in the sample are not the same as
those in the population. Nonsampling risk occurs when audit tests do not uncover
existing exceptions in the sample.
Terms: Sampling and nonsampling risks
Diff: Easy
Objective: LO 15-1
AACSB: Reflective thinking skills
4
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
