ACC 406 Audit Midterm 2 Exam Questions With
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
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
