Question 1

One of the causes of nonsampling risk is:
A) improper supervision and instruction of the client's employees.
B) ineffective audit procedures.
C) inadequate sample size.
D) exceptions being found in the sample.

Accepted Answer

B

Question 2

Which of the following is the risk that an auditor will reach an incorrect conclusion because a sample is not representative of the population?
A) Sampling risk
B) Nonsampling risk
C) Audit risk
D) Detection risk

Accepted Answer

Sampling risk is the risk that an auditor reaches an incorrect conclusion because a sample is not representative of the population. Nonsampling risk is the risk of reaching an incorrect conclusion not related to sampling, such as an error in judgment or misinterpretation of evidence. Audit risk is the risk that the auditor expresses an inappropriate opinion on financial statements that are materially misstated. Detection risk is the risk that the auditor will not detect a material misstatement that exists in the financial statements.

Question 3

One way to control sampling risk is to increase sample size.

Accepted Answer

Increasing sample size can reduce sampling risk by providing a larger and more representative sample, which is more likely to accurately reflect the population being studied. This can help to ensure that any conclusions drawn from the sample are more likely to be accurate and reliable.

Question 4

Which one of the choices below is most correct regarding a cause of sampling risk?
A) Ineffective use of audit procedures
B) Testing less than the entire population
C) Use of extensive tests of controls
D) The use of random sampling

Accepted Answer

Sampling risk is the risk that the auditor's conclusion based on a sample may be different from the conclusion they would reach if they examined every item in the population. Testing less than the entire population can cause sampling risk because the sample may not be representative of the population as a whole. Ineffective use of audit procedures may increase the risk of a failure to detect material misstatements, but it is not directly related to sampling risk. Use of extensive tests of controls may actually decrease sampling risk, as it increases the auditor's understanding of the population and may result in a smaller sample size. The use of random sampling is a method for selecting items from the population and does not in itself cause sampling risk.

Question 5

List the two ways auditors can control sampling risk.

Accepted Answer

The answer of List the two ways auditors can control...

Question 6

A sample in which the characteristics of the sample are the same as those of the population is a(n):
A) variables sample.
B) representative sample.
C) attributes sample.
D) random sample.

Accepted Answer

A representative sample is a sample that has characteristics that are the same as the population from which it was drawn. A variables sample refers to a sample in which the variable being measured varies widely among individuals, while an attributes sample refers to a sample in which only certain attributes or characteristics are measured. A random sample refers to a sample where every individual has an equal chance of being selected, but it does not guarantee that the characteristics of the sample will be representative of the population.

Question 7

To determine if a sample is truly representative of the population,an auditor would be required to:
A) conduct multiple samples of the same population.
B) never use sampling because of the expense involved.
C) audit the entire population.
D) use systematic sample selection.

Accepted Answer

The only certain way to ensure that a sample is truly representative of the population is to audit the entire population. However, this is not always feasible or cost-effective, so sampling is often used as a practical alternative. To increase the likelihood that the sample is representative, the auditor can use various methods of sample selection, such as random or systematic sampling. Conducting multiple samples of the same population can help to improve the accuracy and reliability of the results, but it may not guarantee that the sample is truly representative of the population. Never using sampling is not a practical option in most cases, as it would be too expensive and time-consuming.

Question 8

If an auditor does a test in the wrong direction,sampling risk will increase.

Accepted Answer

The answer of If an auditor does a test in...

Question 9

If a particular internal control is not followed by the client exactly 6% of the time,and the auditor's tests of that control find three control violations in a sample of 50,the sample is considered to be representative.

Accepted Answer

The auditor found control violations in the sample, which means the 6% non-compliance rate holds true for the sample. Therefore, the sample can be considered representative.

Question 10

Sampling risk may be controlled by:
A) 
B) 
C) 
D)

Accepted Answer

Sampling risk can be controlled by increasing the sample size. Choice A, 11ea69e4_d6fc_9a74_b0c5_41153e34bc46_TB3008_11, is the only option that suggests increasing the sample size, therefore it is the best choice. Choice B suggests controlling sampling risk with inherent risk, which is not correct. Choice C suggests using confirmations to control sampling risk, but this only applies in certain situations and may not be the best way to control sampling risk in every scenario. Choice D suggests using analytical procedures, which can help to detect material misstatements, but does not directly control sampling risk.

Question 11

A sample of all items in a population will have a zero sampling risk.

Accepted Answer

Sampling risk refers to the possibility that the sample chosen may not accurately represent the population. If you have the entire population, there is no need to take a sample, therefore there is no risk of the sample not accurately representing the population. Hence, the sampling risk is zero.

Question 12

In practice,auditors do not know whether a sample is representative,even after all testing is complete.

Accepted Answer

Auditors can only infer whether a sample is representative based on the results of their testing. However, there is always a risk that the sample may not be fully representative of the population being audited.

Question 13

Discuss two causes of nonsampling risk.Also discuss ways the auditor can control nonsampling risk.

Accepted Answer

The answer of Discuss two causes of nonsampling risk.Also discuss...

Question 14

Briefly explain why auditors utilize audit sampling.

Accepted Answer

The answer of Briefly explain why auditors utilize audit sampling....

Question 15

Sampling risk results from the auditor's failure to recognize exceptions in transaction data.

Accepted Answer

Sampling risk arises from the possibility that the auditor's conclusion, based on a sample, may be different from the conclusion they would reach if they examined every item in the population. It is not due to the auditor's failure to recognize exceptions but from the inherent risk that the sample may not be representative of the population.

Question 16

An auditor can increase the likelihood that a sample is representative by using care in:
A) 
B) 
C) 
D)

Accepted Answer

The answer of An auditor can increase the likelihood that...

Question 17

Discuss what is meant by "sampling risk" and "nonsampling risk."

Accepted Answer

The answer of Discuss what is meant by "sampling risk"...

Question 18

Which of the following statements is most correct?
A) A sample of all items of a population will eliminate sampling risk, but increase nonsampling risk.
B) The use of an appropriate sample selection technique ensures a representative sample.
C) The auditor's failure to recognize an exception is a significant cause of sampling risk.
D) The use of inappropriate audit procedures is a significant cause of nonsampling risk.

Accepted Answer

Nonsampling risk includes the risk that the auditor's procedures are not appropriate to achieve the specific objective. Using inappropriate audit procedures directly contributes to nonsampling risk because it may lead to incorrect conclusions or the failure to detect material misstatements.

Question 19

When the auditor decides to select less than 100 percent of the population for testing,the auditor is said to use:
A) audit sampling.
B) representative sampling.
C) poor judgment.
D) estimation sampling.

Accepted Answer

When the auditor decides to select less than 100 percent of the population for testing, the auditor is said to use audit sampling. This sampling technique involves selecting a sample of items from the population for testing and evaluating the results of the sample to draw inferences about the entire population. It is not poor judgment or representative sampling, and although estimation may be involved, estimation sampling is a specific technique within audit sampling.

Question 20

Which of the following is the risk that audit tests will not uncover existing exceptions in a sample?
A) Sampling risk
B) Nonsampling risk
C) Audit risk
D) Detection risk

Accepted Answer

The answer of Which of the following is the risk...

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

One of the causes of nonsampling risk is:

Which of the following is the risk that an auditor will reach an incorrect conclusion because a sample is not representative of the population?

One way to control sampling risk is to increase sample size.

Which one of the choices below is most correct regarding a cause of sampling risk?

List the two ways auditors can control sampling risk.

A sample in which the characteristics of the sample are the same as those of the population is a(n) :

To determine if a sample is truly representative of the population,an auditor would be required to:

If an auditor does a test in the wrong direction,sampling risk will increase.

If a particular internal control is not followed by the client exactly 6% of the time,and the auditor's tests of that control find three control violations in a sample of 50,the sample is considered to be representative.

Sampling risk may be controlled by:

A sample of all items in a population will have a zero sampling risk.

In practice,auditors do not know whether a sample is representative,even after all testing is complete.

Discuss two causes of nonsampling risk.Also discuss ways the auditor can control nonsampling risk.

Briefly explain why auditors utilize audit sampling.

Sampling risk results from the auditor's failure to recognize exceptions in transaction data.

An auditor can increase the likelihood that a sample is representative by using care in:

Discuss what is meant by "sampling risk" and "nonsampling risk."

Which of the following statements is most correct?

When the auditor decides to select less than 100 percent of the population for testing,the auditor is said to use:

Which of the following is the risk that audit tests will not uncover existing exceptions in a sample?