ACC 413/513 Final Exam Review

Multiple Choice

Ch 11 MC Question #6:

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Ch 11 MC Question #7:

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Ch 11 MC Question #9:

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Ch 11 MC Question #14:

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Multiple Choice

The acceptable risk of assessing control risk too low is defined as:

• The best estimate of the actual deviations the internal auditor expects to see in the population.

• The maximum amount of actual deviations the internal auditor will accept before they will conclude the control is unacceptably effective.

• The risk that the internal auditor will incorrectly conclude a specific control is more effective than in really is.

• The risk that occurs when internal auditor fails to perform work correctly, such as misapplying a procedure or misinterpreting results.

Multiple Choice

An auditor is beginning testing procedures over a business process and wants to be 96% sure that no invalid conclusions have been reached due to faulty audit work. They assess the inherent risk involved in the business process to be 80%. They assess the risk that controls fail to reduce the risk to an acceptable level to be 40%. Given this information, what is the level of risk that the audit procedures will fail to detect or prevent a material misstatement? 

• 8%

• 10%

• 12.5%

• 15%

Multiple Choice

An auditor calculates that the risk of material misstatement involved in an audit procedure at 50%. The detection risk associated with the audit is calculated at 30%. What is the risk that invalid conclusions will be reached as part of the audit?

• 8%

• 10%

• 12.5%

• 15%

Fill in the Blanks

An auditor is comfortable accepting a 5% risk that they will incorrectly conclude a specified control is more effective than it really is. They are testing a control with statistical sampling and determines the expected population deviation rate to be 4.0% and the tolerable deviation rate to be 9%. The auditor confirms there are 3 deviations found within the sample.

1.What sample size did the auditor choose based on the given information?

Note: if the sample size is not divisible by 5, round up to the nearest number divisible by 5.

Fill in the Blanks

An auditor is comfortable accepting a 5% risk that they will incorrectly conclude a specified control is more effective than it really is. They are testing a control with statistical sampling and determines the expected population deviation rate to be 4.0% and the tolerable deviation rate to be 9%. The auditor confirms there are 3 deviations found within the sample.

2. What is the achieved upper limit as a result of testing

Multiple Choice

An auditor is comfortable accepting a 5% risk that they will incorrectly conclude a specified control is more effective than it really is. They are testing a control with statistical sampling and determines the expected population deviation rate to be 4.0% and the tolerable deviation rate to be 9%. The auditor confirms there are 3 deviations found within the sample.

True or False: The Auditor should confirm this control is operating effectively.

• True

• False

Fill in the Blanks

An auditor is comfortable accepting a 5% risk that they will incorrectly conclude a specified control is more effective than it really is. They are testing a control with statistical sampling and determines the expected population deviation rate to be 4.0% and the tolerable deviation rate to be 9%. The auditor confirms there are 3 deviations found within the sample.

If the total population is 1,000, how many sampling units may be deviant and still allow the auditor to be 95% confident that the control is acceptably accurate?

Multiple Choice

Ch 12 MC Question #2:

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Ch 12 MC Question #3:

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Ch 12 MC Question #6:

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Ch 12 MC Question #11:

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Multiple Choice

Ch 13 MC Question #1:

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Ch 13 MC Question #5:

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Ch 13 MC Question #6:

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Ch 13 MC Question #12:

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Ch 13 MC Question #13:

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Multiple Choice

Ch 14 MC Question #1:

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Ch 14 MC Question #2:

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Multiple Choice

Ch 14 MC Question #8:

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Ch 14 MC Question #13:

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