ACC 406 Audit Midterm 2 exam with |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
correct answers |||\\\
Allowance for sampling risk - correct answer✔✔The uncertainty that results from sampling;
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the difference between the expected mean of the population and the tolerable deviation or
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misstatement
Attribute sampling - correct answer✔✔Sampling used to estimate the proportion of a
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population that possesses a specified characteristic |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
Audit sampling - correct answer✔✔The selection and evaluation of less than 100 percent of
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the population of audit relevance such that the auditor expects the items selected to be
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representative of the population and, thus, likely to provide a reasonable basis for conclusions |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
about the population
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Classical variables sampling - correct answer✔✔The use of normal distribution theory to
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estimate the dollar amount of misstatement for a class of transactions or an account balance
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Desired confidence level - correct answer✔✔The probability that the true but unknown
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measure of the characteristic of interest is within specified limits
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Expected population deviation rate - correct answer✔✔The deviation rate that the auditor
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expects to exist in the population
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Monetary-unit sampling - correct answer✔✔Attribute-sampling techniques used to estimate |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
the dollar amount of misstatement for a class of transactions or an account balance
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, Nonsampling risk - correct answer✔✔The risk that the auditor reaches an erroneous |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
conclusion
Nonstatical sampling - correct answer✔✔Audit sampling that relies on the auditor's judgment
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to determine sample size, select the sample, and/or evaluate the results for the purpose of
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reaching a conclusion about the population |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
Representative sample - correct answer✔✔The evaluation of the sample will result in |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
conclusions that are similar to those that would be drawn if the same procedures were applied
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to the entire population
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Risk of incorrect acceptance - correct answer✔✔The risk that the sample supports the
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conclusion that the control is operating effectively when it is not or that the recorded account
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balance is not materially misstated when it is materially misstated
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Risk of incorrect rejection - correct answer✔✔The risk that the sample supports the
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conclusion that the control is not operating effectively when it actually is or that the recorded
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account balance is materially misstated when it is not materially misstated
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Sampling risk - correct answer✔✔The possibility that the sample drawn is not representative
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of the population and that, as a result, the auditor reaches an incorrect conclusion about the
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reliability of the control, the account balance, or class of transactions based on the sample.
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Sampling unit - correct answer✔✔The individual items constituting a population being
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sampled
Statistical sampling - correct answer✔✔Sampling that uses the laws of probability to select
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
and evaluate the results of an audit sample, thereby permitting the auditor to quantify the
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sampling risk for the purpose of reaching a conclusion about the population
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correct answers |||\\\
Allowance for sampling risk - correct answer✔✔The uncertainty that results from sampling;
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
the difference between the expected mean of the population and the tolerable deviation or
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
misstatement
Attribute sampling - correct answer✔✔Sampling used to estimate the proportion of a
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
population that possesses a specified characteristic |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
Audit sampling - correct answer✔✔The selection and evaluation of less than 100 percent of
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
the population of audit relevance such that the auditor expects the items selected to be
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
representative of the population and, thus, likely to provide a reasonable basis for conclusions |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
about the population
|||\\\ |||\\\
Classical variables sampling - correct answer✔✔The use of normal distribution theory to
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
estimate the dollar amount of misstatement for a class of transactions or an account balance
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
Desired confidence level - correct answer✔✔The probability that the true but unknown
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
measure of the characteristic of interest is within specified limits
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
Expected population deviation rate - correct answer✔✔The deviation rate that the auditor
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
expects to exist in the population
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\
Monetary-unit sampling - correct answer✔✔Attribute-sampling techniques used to estimate |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
the dollar amount of misstatement for a class of transactions or an account balance
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
, Nonsampling risk - correct answer✔✔The risk that the auditor reaches an erroneous |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
conclusion
Nonstatical sampling - correct answer✔✔Audit sampling that relies on the auditor's judgment
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
to determine sample size, select the sample, and/or evaluate the results for the purpose of
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
reaching a conclusion about the population |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
Representative sample - correct answer✔✔The evaluation of the sample will result in |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
conclusions that are similar to those that would be drawn if the same procedures were applied
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
to the entire population
|||\\\ |||\\\ |||\\\
Risk of incorrect acceptance - correct answer✔✔The risk that the sample supports the
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
conclusion that the control is operating effectively when it is not or that the recorded account
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
balance is not materially misstated when it is materially misstated
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
Risk of incorrect rejection - correct answer✔✔The risk that the sample supports the
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
conclusion that the control is not operating effectively when it actually is or that the recorded
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
account balance is materially misstated when it is not materially misstated
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
Sampling risk - correct answer✔✔The possibility that the sample drawn is not representative
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
of the population and that, as a result, the auditor reaches an incorrect conclusion about the
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
reliability of the control, the account balance, or class of transactions based on the sample.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
Sampling unit - correct answer✔✔The individual items constituting a population being
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
sampled
Statistical sampling - correct answer✔✔Sampling that uses the laws of probability to select
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
and evaluate the results of an audit sample, thereby permitting the auditor to quantify the
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
sampling risk for the purpose of reaching a conclusion about the population
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