practice exam 2 - Select the BEST answer to each question...

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Select the  BEST  answer to each question from those given.  Each Problem is worth 4 points. 1. The risk that the projected sample results and the true conditions will differ is: A) nonsampling risk. B) sampling risk. C) inherent risk. D) detection risk. Answer B. 2. Which method of evaluating sampling risk have a different sampling risk when using a fixed sampling plan versus a sequential sampling plan? A) Classical. B) Bayesian. C) both Classical and Bayesian. D) Neither Classical nor Bayesian. Answer A. 3. In an attributes sample for controls where the ENE is less than the MUNE, which of the following will increase sample size? A) Decreasing the population size. B) Increasing the MUNE. C) Increasing the ENE. D) Increasing ENE risk.
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Answer C. 4. Statistical sampling provides a technique for A) Exactly defining materiality. B) Greatly reducing the amount of substantive testing. C) Eliminating judgment in testing. D) Measuring the sufficiency of evidential matter. Answer D. 5. In evaluating a sample for testing attributes using a Bayesian approach with a uniform prior which statement is true: A) For fixed sample sizes the risk calculated will always be slightly less than the risk calculated using the classical method. B) When calculating the sampling risk it makes no difference if a sequential or a fixed sampling plan is used. C) Both A and B are true D) Neither A nor B is true. Answer C. 6. For which of the following audit tests would an auditor most likely use attribute sampling? A) Making an independent estimate of the amount of a LIFO inventory.
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B) Examining invoices in support of the valuation of fixed asset additions. C) Selecting accounts receivable for confirmation of account balances. D) Inspecting employee time cards for proper approval by supervisors. Answer: D 7. An auditor selects a sample of 100 checks over $5,000 by randomly selecting checks written during the year one at a time until 100 checks are found over $5,000. The sampling frame in this case is: A) All checks written during the year. B) All checks written during the year over $5,000.
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This note was uploaded on 06/11/2008 for the course ACCT 4013 taught by Professor Pitman,m during the Spring '08 term at Texas San Antonio.

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practice exam 2 - Select the BEST answer to each question...

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