MODG - Module G - Variables Sampling Module G Variables...

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Module G - Variables Sampling Module G Variables Sampling Multiple Choice Questions 1. Which component of the expanded audit risk model is most closely associated with the risk of incorrect acceptance? A. Analytical procedures risk B. Risk of Material Misstatement C. Nonsampling risk D. Test of details risk Difficulty: Easy Source: Original 2. The sampling method used to examine a population when the auditor wants to estimate a continuous amount (or value) of the population is: A. Attribute sampling B. Balance sampling C. Discovery sampling D. Variables sampling Difficulty: Easy Source: Original 3. Which of the following would not be estimated using variables sampling? A. The balance in the client's accounts receivable B. The extent to which an internal control procedure is not functioning as intended C. The amount of misstatement in a client's inventory D. All of the above would be estimated using variables sampling Difficulty: Easy Source: Original MODG-1
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Module G - Variables Sampling 4. Which of the following courses of action would an auditor most likely follow in planning a sample of cash disbursements if the auditor is aware of several unusually large cash disbursements? A. Set the tolerable error at a lower level than originally planned B. Stratify the cash disbursements population so that the unusually large disbursements are selected C. Increase the sample size to reduce the effect of the unusually large disbursements D. Continue to draw new samples until all the unusually large disbursements appear in the sample Difficulty: Medium Source: AICPA adapted 5. The total amount of actual monetary misstatement found in a sample is referred to as the: A. Projected misstatement B. Tolerable error C. Actual misstatement D. Incremental allowance for sampling risk Difficulty: Easy Source: Original 6. Which of the following is not an advantage associated with dollar unit sampling (DUS)? A. DUS sampling methods typically include transactions or components reflecting relatively large dollar amounts B. DUS sampling methods are more effective in identifying overstatement errors C. DUS sampling methods provide a conservative (higher) estimate of misstatement in the account balance or class of transactions D. DUS sampling methods typically result in relatively small sample sizes Difficulty: Medium Source: Original MODG-2
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Module G - Variables Sampling 7. The amount at which an item would be recorded assuming no mistakes in judgment or incorrect applications of generally accepted accounting principles were made is the: A. Audited value B. Expected error C. Recorded value D. Tolerable error Difficulty: Easy Source: Original 8. The auditor's sample would indicate that the client's account balance is fairly stated when the _____ is less than the _____.
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This note was uploaded on 05/26/2011 for the course ACCT 403 taught by Professor Mark during the Spring '10 term at Strayer.

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MODG - Module G - Variables Sampling Module G Variables...

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