Question 1

Random sampling can be used even if the auditor does not plan on using statistical sampling.

Accepted Answer

Random sampling can still be effective for non-statistical sampling methods, as it still helps to ensure that the sample is representative of the population being audited.

Question 2

Population items with a zero balance have the same chance of being chosen as those with dollar balances when using MUS sampling.

Accepted Answer

Monetary Unit Sampling (MUS) is a probability-proportional-to-size sampling technique, meaning items with larger dollar amounts have a higher chance of being selected. Zero balance items have no chance of being selected in MUS.

Question 3

Monetary unit sampling (MUS)is designed to test whether there is an acceptable risk of account balance understatement.

Accepted Answer

Monetary unit sampling (MUS), also known as dollar-unit sampling, is primarily designed to test for overstatement errors in account balances or transaction values, not understatement.

Question 4

Statistical sampling combines the theory of probability and statistical inference with audit judgment and experience.

Accepted Answer

Statistical sampling involves using probability theory and statistical inference methods to make inferences about a population based on a sample. However, audit judgment and experience are also important in deciding how to select and analyze the sample, as well as in interpreting the results. Therefore, statistical sampling combines both probabilistic and judgmental approaches to auditing.

Question 5

Attributes sampling for testing controls should only be done by the auditor at the end of the fiscal period under audit.

Accepted Answer

Attributes sampling can be done throughout the year during interim audits, as well as at the end of the fiscal period under audit. The timing of the audit testing is determined by the auditor's assessment of risk and the need for evidence to support their opinion.

Question 6

Extracting data from the client's computer system is one of the tasks that can be performed by data analytics tools.

Accepted Answer

Data analytics tools can collect and analyze data from various sources, including client computer systems. However, it is important to obtain proper authorization and ensure data privacy and security measures are in place.

Question 7

Tolerable misstatement is the maximum amount of misstatement the auditor can accept in the population without requiring an audit adjustment or a qualified audit opinion.

Accepted Answer

This statement is true. Tolerable misstatement is a term used in auditing to determine the maximum amount of misstatement that can be allowed in the financial statements without triggering an audit adjustment or a qualified opinion. The auditor sets a tolerable misstatement threshold based on the level of risk and materiality of the financial statement elements. If the actual misstatement exceeds the tolerable misstatement, the auditor must take appropriate actions such as adjusting the financial statements or issuing a qualified opinion.

Question 8

When evaluating an MUS sample,if the auditor finds no misstatements in the sample,the misstatement projection is zero dollars,and the total estimated misstatement will equal the projected misstatement for items in lower-stratum.

Accepted Answer

When using Monetary Unit Sampling (MUS) and no misstatements are found in the sample, the misstatement projection for that sample is indeed zero dollars. However, the total estimated misstatement for the entire population also includes a consideration of sampling risk, not just the projected misstatement from lower strata. The total estimated misstatement is not solely based on findings from lower strata but is a comprehensive evaluation including all strata and the associated risks.

Question 9

A sample which exceeds the tolerable rate of deviation results in the auditor's reliance on internal control effectiveness.

Accepted Answer

A sample that exceeds the tolerable rate of deviation typically leads an auditor to conclude that the internal controls are not effective, reducing their reliance on these controls.

Question 10

Either nonstatistical or statistical sampling is appropriate for substantive tests of details.

Accepted Answer

Both nonstatistical and statistical sampling can be appropriate methods for conducting substantive tests of details, depending on the circumstances of the examination. Nonstatistical sampling may be appropriate when the population being tested is small or highly homogeneous, while statistical sampling may be more appropriate when the population is larger and more diverse. Ultimately, the choice of sampling method should be based on professional judgment and should take into account factors such as the nature of the audit objective, the characteristics of the population being tested, and the risk of material misstatement.

Question 11

The population for MUS is defined as the number of dollars in the population being tested.

Accepted Answer

The population for MUS is defined as the total number of individuals or items being studied, not the number of dollars.

Question 12

Population items with zero balances have no chance of being selected using PPS sampling.

Accepted Answer

PPS sampling is based on proportional allocation, which means the probability of selection is proportional to the size of the item in the population. Therefore, items with zero balances will have a probability of zero of being selected, as their size is zero.

Question 13

Sample size in a MUS sample is a function of risk of incorrect acceptance,tolerable misstatement,and expected misstatement.

Accepted Answer

The sample size in a MUS (Probability-Proportional-to-Size Sampling) sample is determined by considering the risk of incorrect acceptance, tolerable misstatement, and expected misstatement. The higher the risk of incorrect acceptance or the expected misstatement, or the lower the tolerable misstatement, the larger the sample size needs to be to achieve a desired level of precision in the estimate of the population value. Therefore, the statement is true.

Question 14

Projected misstatements are developed by extrapolation from the misstatements in sample items to the population.

Accepted Answer

Projected misstatements are developed by extrapolating the misstatements found in a sample to the entire population, so the statement is true.

Question 15

Evaluating statistical sample results is one of the tasks that can be performed by data analytics tools.

Accepted Answer

Data analytics tools can analyze statistical sample results and provide insights and recommendations based on the data.

Question 16

An example of attributes testing involves obtaining evidence that the client has matched the vendor invoice details with a purchase order and receiving report before payment approval.

Accepted Answer

This is a correct example of attributes testing, as it involves testing whether the client has followed proper procedures in their accounts payable process by verifying that vendor invoice details are matched with a purchase order and receiving report before approving payments.

Question 17

Sampling risk is defined as the risk that an inference drawn from a sample will be incorrect.

Accepted Answer

Sampling risk is indeed defined as the risk that the conclusions drawn from a sample might not be accurate for the entire population. This can occur because of various reasons such as inadequate sample size, biased selection of samples, and faulty measurement techniques. Therefore, there is always a possibility of sampling risk associated with any inferential statistics that are based on a sample.

Question 18

In sampling for substantive tests of details,the population is a group of items in an account balance that the auditor wants to test.

Accepted Answer

This statement is true. In substantive testing, the auditor selects a sample from the population of items in an account balance to determine whether the balance is materially misstated. The population may consist of all transactions or account balances for a specific period or a subset of transactions or balances that the auditor has identified as potentially risky.

Question 19

Nonstatistical samples should be based on the same audit considerations as those used for statistical sampling.

Accepted Answer

Nonstatistical samples should still be based on the same audit considerations as those used for statistical sampling, such as considering the risk of material misstatement, the population size and characteristics, and the desired level of assurance. While the methods used to select a nonstatistical sample may differ from statistical sampling techniques, the audit objectives and considerations should remain the same.

Question 20

Monetary unit sampling (MUS)results in an efficient sample size and concentrates on the dollar value of the account balances.

Accepted Answer

Monetary unit sampling (MUS) focuses on individual dollar values within an account balance, resulting in an efficient and effective sample size. Therefore, the statement is true.

Quiz 8: Specialized Audit Tools: Sampling and Generalized Audit Software