ACC 406 AUDIT MIDTERM 2 EXAM
QUESTIONS WITH VERIFIED
ANSWERS. A+ GRADE 2025/2026.
Allowance for sampling risk - ANS The uncertainty that results from sampling; the difference
between the expected mean of the population and the tolerable deviation or misstatement
Attribute sampling - ANS Sampling used to estimate the proportion of a population that
possesses a specified characteristic
Audit sampling - ANS 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 - ANS 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 - ANS The probability that the true but unknown measure of the
characteristic of interest is within specified limits
Expected population deviation rate - ANS The deviation rate that the auditor expects to exist
in the population
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, Monetary-unit sampling - ANS Attribute-sampling techniques used to estimate the dollar
amount of misstatement for a class of transactions or an account balance
Nonsampling risk - ANS The risk that the auditor reaches an erroneous conclusion
Nonstatical sampling - ANS 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 - ANS 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 - ANS 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 - ANS 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 - ANS 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 - ANS The individual items constituting a population being sampled
Statistical sampling - ANS 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
Tolerable deviation rate - ANS The maximum deviation rate from a prescribed control that
the auditor is willing to accept without altering the planned assessed level of control risk
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
QUESTIONS WITH VERIFIED
ANSWERS. A+ GRADE 2025/2026.
Allowance for sampling risk - ANS The uncertainty that results from sampling; the difference
between the expected mean of the population and the tolerable deviation or misstatement
Attribute sampling - ANS Sampling used to estimate the proportion of a population that
possesses a specified characteristic
Audit sampling - ANS 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 - ANS 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 - ANS The probability that the true but unknown measure of the
characteristic of interest is within specified limits
Expected population deviation rate - ANS The deviation rate that the auditor expects to exist
in the population
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, Monetary-unit sampling - ANS Attribute-sampling techniques used to estimate the dollar
amount of misstatement for a class of transactions or an account balance
Nonsampling risk - ANS The risk that the auditor reaches an erroneous conclusion
Nonstatical sampling - ANS 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 - ANS 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 - ANS 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 - ANS 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 - ANS 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 - ANS The individual items constituting a population being sampled
Statistical sampling - ANS 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
Tolerable deviation rate - ANS The maximum deviation rate from a prescribed control that
the auditor is willing to accept without altering the planned assessed level of control risk
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
