Question 1

When using monetary unit sampling,the recorded dollar population is a definition of all the items in the
A)population.
B)population which the auditor has included in the sample.
C)population which contain errors.
D)sample which contain errors.

Accepted Answer

The recorded dollar population in monetary unit sampling represents the total monetary value of the entire population, including items that are not sampled. Therefore, it is a definition of all the items in the population, regardless of whether they contain errors or not.

Question 2

An auditor uses monetary unit sampling with a sampling interval of $20,000 and detects an item with a recorded amount of $10,000 with an audited value of $4,000.The projected misstatement of the sample is
A)$12,000.
B)$6,000.
C)$10,000.
D)$3,000.

Accepted Answer

The answer of An auditor uses monetary unit sampling with...

Question 3

Using statistical sampling to assist in verifying the year-end accounts payable balance,an auditor has accumulated the following data 
Projecting the misstatement to the population,the auditor's estimate of year-end accounts payable balance would be:
A)$5,050,000.
B)$5,125,000.
C)$6,000,000.
D)$6,150,000.

Accepted Answer

Assuming the auditor used stratified random sampling to obtain a representative sample of the accounts payable population, we can use the formula for projected misstatement to estimate the year-end accounts payable balance.
Projected misstatement = (Sample misstatement / Sample size) x Population size
= (90,000 / 30) x 20,000
= 600,000
Therefore, the auditor's estimate of year-end accounts payable balance would be the population size plus the projected misstatement, or $6,000,000. Choice C is the best answer.

Question 4

Which of the following item(s)are needed to determine the sample size using MUS?
A) 
B) 
C) 
D)

Accepted Answer

The answer of Which of the following item(s)are needed to...

Question 5

An auditor is confirming a population of accounts receivable for monetary correctness.The population totals $2,000,000 and a sample of 200 confirmations is obtained.Upon audit,no misstatements are uncovered in the sample.Assuming an ARIA of 10%,the confidence factor would be 2.31.Applied to a sampling interval of $10,000,the upper misstatement bound is calculated as
A)$462.
B)$4,329.
C)$23,100.
D)$865,801.

Accepted Answer

The upper misstatement bound is calculated by multiplying the confidence factor (2.31) by the sampling interval ($10,000), resulting in $23,100. This represents the maximum misstatement that the auditor can tolerate while still maintaining the desired level of assurance (90% in this case, given an ARIA of 10%).

Question 6

When the sample selection is done using probability proportional to size sample selection (PPS),
A)the actual number of units selected for testing may be more than the computed sample size.
B)the auditor must use systematic selection,rather than random selection of dollars.
C)population items with a zero recorded balance have no chance of being selected.
D)negative balances must be treated as positive balances.

Accepted Answer

In PPS, the selection of items is proportional to their recorded size or value, so population items with zero balances have zero probability of being selected. This is known as the "zero-frequency problem". Therefore, option C is the correct choice. Options A and B are incorrect as they do not relate to PPS sampling. Option D is also incorrect as negative balances are still considered as negative balances and not treated as positive ones.

Question 7

The auditor must consider the possibility that the True population misstatement is greater than the amount of misstatement that is tolerable when the auditor is performing
A) 
B) 
C) 
D)

Accepted Answer

The answer of The auditor must consider the possibility that...

Question 8

In monetary unit sampling,the relationship between tolerable misstatement size and required sample size is
A)direct.
B)inverse.
C)varied.
D)indeterminable.

Accepted Answer

In monetary unit sampling, the relationship between tolerable misstatement size and required sample size is inverse. This means that as the tolerable misstatement size increases, the required sample size decreases, and vice versa.

Question 9

When using monetary unit sampling,evaluating the likelihood of unrecorded items in the population is
A)unnecessary.
B)impossible.
C)possible but difficult.
D)an automatic outcome of the process.

Accepted Answer

The answer of When using monetary unit sampling,evaluating the likelihood...

Question 10

To calculate the sample size in monetary unit sampling,
A)the confidence factor is multiplied by the tolerable misstatement as a percentage of the population value.
B)the confidence factor is divided by the tolerable misstatement as a percentage of the population value.
C)the tolerable misstatement is divided by the population recorded value.
D)the tolerable misstatement is multiplied by the population recorded value.

Accepted Answer

In monetary unit sampling, the sample size is determined by dividing the confidence factor by the tolerable misstatement as a percentage of the population value. This approach helps in assessing the risk and determining an appropriate sample size for auditing purposes.

Question 11

An accounts receivable population contains a total of four customers.The accounts,the amounts,and the cumulative total are shown below.Monetary unit sampling is to be used. 
Based on the information above,the population size is
A)4)
B)574.
C)1,272.
D)$2,684.

Accepted Answer

The answer of An accounts receivable population contains a total...

Question 12

Which balance-related audit objective cannot be assessed using monetary unit sampling?
A)accuracy
B)completeness
C)existence
D)All of the above can be assessed using monetary unit sampling.

Accepted Answer

Monetary unit sampling is primarily used to assess monetary misstatements in financial statements. While completeness can be assessed using this method, accuracy and existence require additional procedures such as confirmation and physical observation.

Question 13

Calculating the sample size using monetary unit sampling depends on which of the following factors?
A) 
B) 
C) 
D)

Accepted Answer

The sample size using monetary unit sampling depends on the tolerable misstatement, expected misstatement, and recorded amount. Choice A (11ea4e31_84f7_3927_9ed3_8d0c6317da21_TB2672_11) seems to represent the factors related to monetary unit sampling. Choice B and C seem to be randomly generated options, and choice D may be related to a different question or context.

Question 14

The most commonly used method of statistical sampling for tests of details of balances is
A)attributes sampling.
B)systematic sampling.
C)discovery sampling.
D)monetary unit sampling.

Accepted Answer

Monetary unit sampling is the most commonly used method of statistical sampling for tests of details of balances. This method involves selecting a sample of individual monetary units from the population, which can provide a more accurate representation of the population's overall characteristics compared to other sampling methods. Attributes sampling is used for tests of controls, systematic sampling is less commonly used, and discovery sampling is a non-statistical sampling method.

Question 15

Which of the following is not a problem with monetary unit selection?
A)population items with a zero recorded balance
B)population items that should have a zero balance but do not
C)accounts with negative balances
D)accounts with small recorded balances that are significantly understated

Accepted Answer

Population items that should have a zero balance but do not typically result in a material misstatement and are therefore a problem with monetary unit sampling. The other options listed are common problems with monetary unit selection.

Question 16

PPS samples can be obtained in an efficient manner using all but which of the following?
A)hand selection by the auditor
B)computer software
C)random number tables
D)systematic sampling techniques

Accepted Answer

Hand selection by the auditor is not considered an efficient way to obtain PPS samples because it can be time-consuming and prone to biases or errors. Computer software, random number tables, and systematic sampling techniques are all efficient and reliable methods for selecting PPS samples.

Question 17

The allowance for sampling risk when no misstatements are found in the sample is
A)tolerable risk of misstatement.
B)basic precision.
C)confidence factor.
D)population variance.

Accepted Answer

The allowance for sampling risk when no misstatements are found in the sample is known as the basic precision, which represents the maximum amount by which the true proportion of a population characteristic may differ from the sample proportion, with a stated level of confidence. The other options are unrelated to this concept.

Question 18

The statistical methods used to evaluate monetary unit samples
A)neither exclude nor include units twice.
B)may permit the inclusion of a unit in the sample more than once.
C)do not permit a unit to be included in the sample more than once.
D)ignore the possibility that a unit may be included in a sample more than once.

Accepted Answer

Monetary unit sampling, a method used in auditing, allows for the possibility that a unit (in this case, a monetary unit) may be included in the sample more than once. This is because each dollar (or other currency unit) has an equal chance of selection, meaning units with larger values (and thus more dollars) have a higher chance of being selected multiple times.

Question 19

An estimate of the largest likely overstatement in a population at a given ARIA,using monetary unit sampling is the
A)point estimates.
B)precision intervals.
C)confidence intervals.
D)misstatement bound.

Accepted Answer

The misstatement bound is the estimate of the largest likely overstatement or understatement in a population at a given ARIA using monetary unit sampling. Point estimates, precision intervals, and confidence intervals do not specifically address the largest likely overstatement.

Question 20

Why do auditors find MUS appealing?
A)MUS increases the likelihood of selecting a balance of high and low dollar items.
B)MUS is easy to use in the audit environment.
C)MUS provides a nonstatistical,rather than a statistical,conclusion.
D)When misstatements are found,MUS rarely produces bounds in excess of materiality.

Accepted Answer

The answer of Why do auditors find MUS appealing?
A)MUS increases...

Quiz 17: Audit Sampling for Tests of Details of Balances

When using monetary unit sampling,the recorded dollar population is a definition of all the items in the

An auditor uses monetary unit sampling with a sampling interval of $20,000 and detects an item with a recorded amount of $10,000 with an audited value of $4,000.The projected misstatement of the sample is

Using statistical sampling to assist in verifying the year-end accounts payable balance,an auditor has accumulated the following data Projecting the misstatement to the population,the auditor's estimate of year-end accounts payable balance would be:

Which of the following item(s) are needed to determine the sample size using MUS?

When the sample selection is done using probability proportional to size sample selection (PPS) ,

The auditor must consider the possibility that the True population misstatement is greater than the amount of misstatement that is tolerable when the auditor is performing

In monetary unit sampling,the relationship between tolerable misstatement size and required sample size is

When using monetary unit sampling,evaluating the likelihood of unrecorded items in the population is

To calculate the sample size in monetary unit sampling,

An accounts receivable population contains a total of four customers.The accounts,the amounts,and the cumulative total are shown below.Monetary unit sampling is to be used. Based on the information above,the population size is

Which balance-related audit objective cannot be assessed using monetary unit sampling?

Calculating the sample size using monetary unit sampling depends on which of the following factors?

The most commonly used method of statistical sampling for tests of details of balances is

Which of the following is not a problem with monetary unit selection?

PPS samples can be obtained in an efficient manner using all but which of the following?

The allowance for sampling risk when no misstatements are found in the sample is

The statistical methods used to evaluate monetary unit samples

An estimate of the largest likely overstatement in a population at a given ARIA,using monetary unit sampling is the

Why do auditors find MUS appealing?