F - F Student: _ 1. Which of the following components of...

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F Student: ___________________________________________________________________________ 1. Which of the following components of the audit risk model is most closely associated with attributes sampling? A. Audit risk. B. Control risk. C. Detection risk. D. Inherent risk. 2. The purpose of tests of controls is to determine that: A. Internal control policies and procedures are functioning as prescribed. B. Substantive procedures can be kept to a minimum. C. Errors and irregularities are prevented or detected in a timely manner. D. The auditor has an understanding of internal control. 3. As part of the assessment of control risk, the auditor decided to use audit sampling. After specifying the audit objectives, what would the auditor most likely do next? A. Determine the sample size. B. Select the sample. C. Perform tests of control activities. D. Define the deviation conditions. 4. For which of the following audit tests would an auditor most likely use attributes sampling? A. Making an independent estimate of the amount of a LIFO inventory. 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. 5. The ultimate purpose of control risk assessment is to: A. Estimate the overall risk of failing to detect material misstatements. B. Decide the nature, timing, and extent of substantive procedures. C. Determine the risk of incorrect acceptance. D. Determine the probability that errors entered the accounts. 6. If the auditor were interested in ensuring that all sales have been recorded, the population would be defined as: A. Entries in the cash receipts journal. B. Entries in the general journal. C. Remittance advices. D. Shipping documents.
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7. What is the general order in which the following steps in attributes sampling are performed? A. 1 = Define the population B. 2 = Determine the objective of sampling C. 3 = Determine the sample size D. 4 = Select the sample E. 1, 2, 3, 4. F. 2, 1, 3, 4. G. 1, 2, 4, 3. H. 2, 1, 4, 3. 8. Which of the following statements is correct concerning statistical sampling in tests of controls? A. As the population increases, the sample size should increase proportionally. B. The expected population deviation rate can either be based on prior audits or a small sample of controls examined in the current year. C. There is an inverse relationship between the expected population deviation rate and sample size. D. In determining the tolerable rate of deviation, an auditor considers detection risk and the sample size. 9. Samples to test internal control activities are intended to provide a basis for an auditor to conclude whether: A. The control activities are operating effectively. B. The financial statements are materially misstated.
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This note was uploaded on 10/04/2011 for the course SOM 6401 taught by Professor Chrits during the Spring '11 term at University of Texas at Austin.

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F - F Student: _ 1. Which of the following components of...

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