Question 1

List the three phases in audit sampling for both statistical and nonstatistical sampling.

Accepted Answer

The answer of List the three phases in audit sampling...

Question 2

The process which requires the calculation of an interval and then selects the items based on the size of the interval is
A)statistical sampling.
B)random sample selection.
C)systematic sample selection.
D)computerized sample selection.

Accepted Answer

The process described is systematic sample selection, which involves selecting every nth item after calculating the sampling interval. Statistical sampling and random sample selection do not necessarily involve the calculation of an interval, and computerized sample selection may use various methods including systematic sampling but is not a distinct option in this question.

Question 3

Which of the following is a correct statement regarding probabilistic versus nonprobabilistic sample selection?
A)Auditors may make nonstatistical evaluations when using probabilistic sample selection.
B)The AICPA recommends probabilistic sample selection.
C)Nonstatistical sampling can't provide results that are as effective as a statistical sample.
D)There is only one type of nonprobabilistic sample selection method.

Accepted Answer

Probabilistic sampling involves the selection of samples based on statistical probability and is recommended by the AICPA. However, auditors may make nonstatistical evaluations when using probabilistic sample selection if they believe it is appropriate for the situation. Nonprobabilistic sampling, on the other hand, involves the selection of samples using non-random methods and can be effective in certain circumstances. Therefore, option C is incorrect as it is a blanket statement that nonstatistical sampling cannot be as effective as statistical sampling. Option D is also incorrect as there are multiple types of nonprobabilistic sample selection methods such as judgmental sampling and haphazard sampling.

Question 4

Which of the following is not a phase in the planning of both statistical and nonstatistical sampling?
A)Plan the sample.
B)Determine the probability that fraud has occurred.
C)Select the sample and perform the tests.
D)Evaluate the results.

Accepted Answer

Determining the probability that fraud has occurred is not a phase in the planning of either statistical or nonstatistical sampling. The other three choices (plan the sample, select the sample and perform the tests, and evaluate the results) are all phases in both types of sampling.

Question 5

Which of the following statements is most correct with respect to the evaluation of nonprobabilistic sample results?
A)It is acceptable to make nonprobabilistic evaluations only when probabilistic sample selection is used.
B)It is acceptable to make nonprobabilistic evaluations only if the auditor cannot quantify sampling risk.
C)It is never acceptable to evaluate a nonprobabilistic sample using statistical methods.
D)All of the above are correct.

Accepted Answer

Nonprobabilistic sampling does not involve random selection, making it inappropriate to evaluate such samples using statistical methods, which rely on the principles of randomness and probability to quantify sampling risk and draw conclusions about the population.

Question 6

In systematic sample selection,the population size is divided by the number of sample items desired in order to determine the
A)sampling interval.
B)tolerable exception rate.
C)computed upper exceptions rate.
D)mean.

Accepted Answer

The sampling interval is determined by dividing the population size by the desired number of sample items. This ensures that each item in the population has an equal chance of being selected for the sample. The other options (B, C, and D) are not relevant to the process of systematic sampling.

Question 7

Which of the following is an accurate statement regarding sampling?
A)A 95 percent confidence level provides a 5 percent sampling risk.
B)The auditor can perform the audit tests only after the sample items are selected.
C)The purpose of planning the sample is to make sure that the audit tests are performed in a manner that provides the desired sampling risk and minimizes the likelihood of nonsampling errors.
D)All of the above are accurate statements.

Accepted Answer

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Question 8

Simple random sampling
A)is used when there is a need to emphasize one or more types of population items.
B)requires both input and output parameters to be set when using a random number generator.
C)is generally used with replacement sampling.
D)is a probabilistic sampling method.

Accepted Answer

Simple random sampling is a probabilistic sampling method where each item in the population has an equal chance of being selected for the sample, without any bias or predetermined criteria. It does not require emphasizing any specific type of population items, setting input and output parameters for a random number generator, or using replacement sampling.

Question 9

A sample in which every possible combination of items in the population has an equal chance of constituting the sample is a
A)random sample.
B)statistical sample.
C)judgment sample.
D)representative sample.

Accepted Answer

A sample in which every possible combination of items in the population has an equal chance of constituting the sample is known as a random sample. Random sampling is the preferred method of sampling in research as it avoids any bias and is more likely to be representative of the population. Statistical sample, judgment sample, and representative sample do not necessarily have all possible combinations having an equal chance of being chosen.

Question 10

When using nonstatistical sampling,the sample must be a probabilistic one.

Accepted Answer

Nonstatistical sampling does not require a probabilistic sample. In fact, it may involve selecting items based on judgment or convenience, rather than through a random process.

Question 11

Which of the following statements is most correct with concerning the quantification of sampling risk?
A)Sampling risk cannot be quantified.
B)Sampling risk can be quantified only when nonprobabilistic selection techniques are used to select the sample.
C)Sampling risk can be quantified only when probabilistic selection techniques are used to select the sample.
D)None of the above is correct.

Accepted Answer

Sampling risk can be quantified only when probabilistic selection techniques are used to select the sample. Probabilistic sampling involves randomly selecting items from the population, which allows for statistical analysis to determine the level of sampling risk. Nonprobabilistic sampling, on the other hand, involves selecting items based on the auditor's judgment or other nonstatistical criteria, making it difficult to quantify sampling risk.

Question 12

When a population is divided into subpopulations,usually by dollar size,and larger samples are taken from the subpopulation with the larger sizes,________ is being used.
A)sampling with probability proportional to size
B)stratified sampling
C)block sampling
D)haphazard sampling

Accepted Answer

The answer of When a population is divided into subpopulations,usually...

Question 13

An advantage of using statistical sampling techniques is that such techniques
A)quantify sampling risk.
B)eliminate the need for judgmental decisions.
C)define the values of precision and reliability required to provide audit satisfaction.
D)have been established in the courts to be superior to judgmental sampling.

Accepted Answer

Statistical sampling techniques allow for the quantification of sampling risk, which is the possibility of a sample not being representative of the entire population. This quantification allows auditors to determine the appropriate sample size to minimize this risk and achieve the desired level of confidence in the results. However, statistical sampling techniques still require judgmental decisions regarding sample selection and interpretation of results.

Question 14

Which of the following statements is not correct regarding probabilistic and nonprobabilistic sample selection?
A)In probabilistic selection,every population item has a known chance of being selected.
B)It is acceptable to evaluate a nonprobabilistic sample using statistical methods.
C)Probabilistic selection is required for all statistical sampling methods.
D)Both probabilistic and nonprobabilistic methods are acceptable and commonly used.

Accepted Answer

Nonprobabilistic samples often do not allow for the use of statistical methods to infer from the sample to the population because the probability of selection is unknown, making it difficult to assess sampling error and generalize findings.

Question 15

Auditors who prefer statistical to nonstatistical sampling believe that the principal advantage of statistical sampling flows from its ability to
A)quantify sampling risk.
B)promote a more legally defensible procedural approach.
C)define the precision required to provide audit satisfaction.
D)establish conclusive audit evidence with decreased audit effort.

Accepted Answer

The principal advantage of statistical sampling is its ability to quantify sampling risk, which allows auditors to control this risk and determine the appropriate sample size for achieving the desired level of assurance. Statistical sampling also allows auditors to measure and evaluate the results of the sample, providing a foundation for making conclusions about the population from which the sample was drawn.

Question 16

It is equally acceptable under professional auditing standards for auditors to use either statistical or nonstatistical sampling methods.

Accepted Answer

According to auditing standard AU-C 530, auditors can use either statistical or nonstatistical sampling methods, as long as the chosen method is appropriate for the audit objective and provides sufficient evidence.

Question 17

Describe the differences between statistical and nonstatistical sampling in terms of (1)the sample selection methods used,and (2)quantification of sampling risk.

Accepted Answer

The answer of Describe the differences between statistical and nonstatistical...

Question 18

The advantage of systematic sample selection is that
A)it is easy to use.
B)there is limited possibility of it being biased.
C)it is unnecessary to determine if the population is arranged randomly.
D)it automatically selects items material to the financial statements.

Accepted Answer

The answer of The advantage of systematic sample selection is...

Question 19

Which of the following methods of sample selection is appropriately used when selecting a random sample?
A) 
B) 
C) 
D)

Accepted Answer

The answer of Which of the following methods of sample...

Question 20

There are three phases in both statistical and nonstatistical sampling.The first phase is to
A)generate random numbers for the sample.
B)evaluate the results.
C)plan the sample.
D)select the sample.

Accepted Answer

The first phase in both statistical and nonstatistical sampling is to plan the sample. This involves defining the population, determining the sample size and selecting the sampling method. The other options listed (A, B, and D) are all steps that occur after the sample has been planned.

Quiz 15: Audit Sampling for Tests of Controls and Substantive Tests of Transactions

List the three phases in audit sampling for both statistical and nonstatistical sampling.

The process which requires the calculation of an interval and then selects the items based on the size of the interval is

Which of the following is a correct statement regarding probabilistic versus nonprobabilistic sample selection?

Which of the following is not a phase in the planning of both statistical and nonstatistical sampling?

Which of the following statements is most correct with respect to the evaluation of nonprobabilistic sample results?

In systematic sample selection,the population size is divided by the number of sample items desired in order to determine the

Which of the following is an accurate statement regarding sampling?

Simple random sampling

A sample in which every possible combination of items in the population has an equal chance of constituting the sample is a

When using nonstatistical sampling,the sample must be a probabilistic one.

Which of the following statements is most correct with concerning the quantification of sampling risk?

When a population is divided into subpopulations,usually by dollar size,and larger samples are taken from the subpopulation with the larger sizes,________ is being used.

An advantage of using statistical sampling techniques is that such techniques

Which of the following statements is not correct regarding probabilistic and nonprobabilistic sample selection?

Auditors who prefer statistical to nonstatistical sampling believe that the principal advantage of statistical sampling flows from its ability to

It is equally acceptable under professional auditing standards for auditors to use either statistical or nonstatistical sampling methods.

Describe the differences between statistical and nonstatistical sampling in terms of (1)the sample selection methods used,and (2)quantification of sampling risk.

The advantage of systematic sample selection is that

Which of the following methods of sample selection is appropriately used when selecting a random sample?

There are three phases in both statistical and nonstatistical sampling.The first phase is to