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Auditing & Assurance 101 Practice Test: Audit Sampling for Tests of Controls and Substantive Tests of Transactions
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Audit sampling is a technique that allows auditors to test a subset of transactions or account balances to draw conclusions about the entire population. It's an investigative tool that involves selecting less than 100% of the total items within the population of items to be audited. The sample is the portion of the population that the auditor actually examines. This process helps to minimize the risk for users of financial statements who make business and investment decisions based on the company's financial ability and profit-gaining capacity.  Audit sampling is used to conduct tests of... Show more
Auditing & Assurance 101 Practice Test: Audit Sampling for Tests of Controls and Substantive Tests of Transactions
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25 Questions

1. Which of the following must be set prior to testing a sample?
2. Which of the following statements is most correct?
3. In performing a review of a client's cash disbursements, an auditor uses systematic sample selection with a random start. The primary disadvantage of this technique is population items:
4. When a small preliminary sample is used to estimate the population exception rate, it (the preliminary sample) cannot be included in the ultimate sample.
5. Which one of the choices below is most correct regarding a cause of sampling risk?
6. The relationship of acceptable risk of accessing control risk too low (ARACR) to sample size is:
7. Which of the following statements is not correct regarding probabilistic and non-probabilistic sample selection?
8. Auditors who prefer statistical to nonstatistical sampling believe that the principal advantage of statistical sampling flows from its ability to:
9. Which of the following statements regarding block sampling is least likely to be true?
10. An auditor uses statistical sampling for attributes in internal control testing. She would most likely reduce the planned reliable on the control tested when:
11. In practice, auditors do not know whether a sample is representative, even after all testing is complete.
12. The auditor may estimate the 'estimated population exception rate' by taking a small preliminary sample from the current year's data or by using the prior year's experience with the client.
13. In the evaluation of the results of an attributes sample, the fact that the exception rate in the sample was 2% rather than the estimated population exception rate of 4% would cause the computed upper exception rate to:
14. If an auditor, planning to use statistical sampling, is concerned with the number of a client's sales invoices that contain mathematical errors, the auditor would most likely utilize which sampling technique?
15. Which of the following is an advantage of systematic sample selection over random number sampling?
16. The risk which the auditor is willing to take in accepting a control as being effective when the true population exception rate is greater than a tolerable rate is the:
17. Which of the following statements is a valid criticism of non-statistical sampling?
18. When the computed upper exception rate is greater than the tolerable exception rate in attributes sampling, one possible appropriate course of action is to increase sample size.
19. When the auditor decides to select less than 100 percent of the population for testing, the auditor is said to use:
20. When using nonstatistical sampling, the sample must be a probabilistic one.
21. If the size of the sample to be used in a test of attributes is not determined by using statistical concepts, but the sample is chosen in accordance with random selection procedures:
22. When audit procedures have been completed for an attributes sampling application, the auditor must generalize from the sample to the population. Which of the following statements would be incorrect regarding this process?
23. It is equally acceptable under professional auditing standards for auditors to use either statistical or nonstatistical sampling methods.
24. In attributes sampling, an estimate of the expected population exception rate is necessary to plan the sample size. The relationship of expected population exception rate (EPER) to sample size is:
25. In nonstatistical sampling, the calculated sampling error is the difference between the tolerable exception rate and the sample exception rate.

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