13.What is an auditor's evaluation of a statistical sample for attributes when a test of 50 documents results in two exceptions if the tolerable rate is 7%, the expected population exception rate is 5%, and the allowance for sampling risk is 2%?a.Modify the assessed level of control risk because the tolerable rate plusthe allowance for sampling risk exceeds the population exception rate.b.Accept the sample results as support for the assessed level of control risk because the sample exception rate plus the allowance for sampling risk is less than the tolerable rate.c.Accept the sample results as support for the assessed level of control risk because the tolerable rate minus the allowance for sampling risk equals theexpected population exception rate.d.Modify the assessed level of control risk because the sample exception rate plus the allowance for sampling risk exceeds the tolerable rate.14.A customer has returned an accounts receivable confirmation indicating that the amount owed as of December 31st is lower than the amount shown on the client's books. Which of the following explanations would notexplain the difference:15.Which of the following factors is (are) considered in determining the sample size for atest of controls?ExpectedTolerableException RateException Rate4
Problem 1 - Types of Tests and Objectives(12 points) - For each audit procedure, identify the following (use the abbreviations in bold for a., and the numbers for b). Choose only oneresponse for each item. a.Whether it is a test of control (TOC), a substantive test of transactions (STOT), a testof details of balances (TODB) or an analytical procedure (AP) (1/2 point each). b.The primary audit objective being satisfied. Answer N/Afor analytical procedures. (1 point each). List only one response, even if the test has multiple objectives.Balance-related Audit Transaction-related Audit Objectives Objectives 1. Existence 9. Occurrence2. Completeness 10. Completeness3. Accuracy 11. Accuracy4. Classification 12. Classification5. Cutoff 13. Timing6. Detail tie-in 14. Posting and summarization7. Realizable value 8. Rights and obligations1.Account for a sequence of receiving reports and verify that each one has an invoice attached.a. _______________ b. _________________ 2.Examine dates on sales invoices and shipping documents for a sample of transactions before and after year-end.