Final Exam: Advanced Auditing| 149 Questions and Answers 100% Accurate.

Which of the following major stages of the audit is most closely related to variables sampling? a. Determining preliminary levels of performance materiality b. Performing tests of controls procedures c. Performing substantive procedures d. Searching for the possible occurrence of subsequent events - ANSWER-c. Performing substantive procedures Which of the following types of variables sampling plans has a tendency to select higher-dollar items for examination? a. Difference estimation b. Mean-per-unit estimation c. Monetary unit sampling d. Ratio estimation - ANSWER-c. Monetary unit sampling When evaluating the results of an MUS sampling application, the audit team should compare the upper limit on misstatements to the: a. Expected misstatement b. Incremental allowance for sampling risk c. Projected misstatement d. Tolerable misstatement - ANSWER-d. Tolerable misstatement When making a decision about the dollar amount in an account balance based on a sample, the audit team considers the risk of incorrect acceptance to be more serious than the risk of incorrect rejection because: a. The incorrect rejection decision impairs the efficiency of the audit b. The audit team will do additional work and discover the misstatement of the incorrect decision c. The incorrect acceptance decision impairs the effectiveness of the audit d. Sufficient appropriate audit evidence will not have been obtained - ANSWER-c. The incorrect acceptance decision impairs the effectiveness of the audit The unique feature of monetary unit sampling is that: a. 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 - ANSWER-d. The population is defined as the number of monetary units in an account balance or class of transactions When determining sample size under monetary unit sampling, an audit team does not