Audit: Sampling Exam Question & Answers (
2025)
Audit Sampling - Correct Answers ✅The application of an audit
procedure to less than 100% of the items within an account balance or
class of transactions for the purpose of evaluating some characteristic
of the balance.
Types of Sampling - Correct Answers ✅1) Statistical and 2) Non-
Statistical
Statistical Sampling - Correct Answers ✅Has an ability to objectively
limit the sampling risk to a quantifiable level. Many additional costs.
Non-Statistical Sampling - Correct Answers ✅Easy, used in real life.
Audit Risk Model - Correct Answers ✅AR=IRxCRxDR
AR: Audit Risk, risk of incorrect opinion
IR: Inherent Risk, natural risk
CR: Control risk
RMM=IR+CR
RMM can only be assessed by the auditor
DR: Detection Risk, risk that the auditor does not catch a material
misstatement, is controlled by the auditor
, Audit: Sampling Exam Question & Answers (
2025)
Detection Risk - Correct Answers ✅Risk that the auditor does not
catch a material misstatement. This risk is controlled by the auditor. It
is comprised of Sampling Risk and Non-Sampling Risk.
Sampling Risk - Correct Answers ✅Aka, bad luck. The risk that the
auditor's conclusion, based on a sample, might be different from the
conclusion which would be reached if the test were applied in the same
way to the entire population.
Non-Sampling Risk - Correct Answers ✅Aka, human error. The risk of
an erroneous conclusion caused by a factor not related to sampling risk.
For example, the auditor may (1) apply inappropriate procedures, (2)
misinterpret audit evidence, or (3) not recognize misstatements or
control deviations.
Tests of Controls - Correct Answers ✅Assessing the effectiveness in
preventing or detecting material misstatements in financial statement
assertions. Use attribute testing.
Substantive Test - Correct Answers ✅Evidence about the validity and
propriety of the accounting treatment of transactions and balances.
Use variables testing.
Dual Purpose Test - Correct Answers ✅Evidence about both tests of
controls and substantive tests.
2025)
Audit Sampling - Correct Answers ✅The application of an audit
procedure to less than 100% of the items within an account balance or
class of transactions for the purpose of evaluating some characteristic
of the balance.
Types of Sampling - Correct Answers ✅1) Statistical and 2) Non-
Statistical
Statistical Sampling - Correct Answers ✅Has an ability to objectively
limit the sampling risk to a quantifiable level. Many additional costs.
Non-Statistical Sampling - Correct Answers ✅Easy, used in real life.
Audit Risk Model - Correct Answers ✅AR=IRxCRxDR
AR: Audit Risk, risk of incorrect opinion
IR: Inherent Risk, natural risk
CR: Control risk
RMM=IR+CR
RMM can only be assessed by the auditor
DR: Detection Risk, risk that the auditor does not catch a material
misstatement, is controlled by the auditor
, Audit: Sampling Exam Question & Answers (
2025)
Detection Risk - Correct Answers ✅Risk that the auditor does not
catch a material misstatement. This risk is controlled by the auditor. It
is comprised of Sampling Risk and Non-Sampling Risk.
Sampling Risk - Correct Answers ✅Aka, bad luck. The risk that the
auditor's conclusion, based on a sample, might be different from the
conclusion which would be reached if the test were applied in the same
way to the entire population.
Non-Sampling Risk - Correct Answers ✅Aka, human error. The risk of
an erroneous conclusion caused by a factor not related to sampling risk.
For example, the auditor may (1) apply inappropriate procedures, (2)
misinterpret audit evidence, or (3) not recognize misstatements or
control deviations.
Tests of Controls - Correct Answers ✅Assessing the effectiveness in
preventing or detecting material misstatements in financial statement
assertions. Use attribute testing.
Substantive Test - Correct Answers ✅Evidence about the validity and
propriety of the accounting treatment of transactions and balances.
Use variables testing.
Dual Purpose Test - Correct Answers ✅Evidence about both tests of
controls and substantive tests.
