QUIZ 1 REV5 - MIDTERM

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

• variables sample.

• representative sample.

• attributes sample.

• random sample.

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

• ineffective use of audit procedures

• testing less than the entire population

• use of extensive tests of controls

• the possibility that a properly-selected sample still may not be representative

Which of the following statements is most correct?

• A sample of all items of a population will eliminate sampling risk, but increase nonsampling risk.

• The use of an appropriate sample selection technique ensures a representative sample.

• The auditor's failure to recognize an exception is a significant cause of sampling risk.

• The use of inappropriate audit procedures is a significant cause of nonsampling risk.

Which of the following statements best expresses the impact that the performance of audit procedures has on statistical vs. nonstatistical sampling?

• Audit procedures on the sample item will vary as a result of using either statistical or nonstatistical sampling.

• The audit procedures will be the same for either statistical or nonstatistical sampling but they must be performed differently for each.

• Statistical sampling requires quantitative audit procedures, whereas nonstatistical sampling requires judgmental audit procedures.

• Audit procedures on the sample item will not vary as a result of using either statistical or nonstatistical sampling.

An advantage of using statistical sampling techniques is that such techniques:

• mathematically measure risk.

• eliminate the need for judgmental decisions.

• define the values of precision and reliability required to provide audit satisfaction.

• have been established in the courts to be superior to judgmental sampling.

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

• audit sampling.

• representative sampling.

• poor judgment.

• estimation sampling.

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

• conduct multiple samples of the same population.

• never use sampling because of the expense involved.

• audit the entire population.

• use systematic sample selection.

One of the ways to eliminate nonsampling risk is through:

• proper supervision and instruction of the client's employees.

• proper supervision and instruction of the audit team.

• the use of attributes sampling rather than variables sampling.

• controls which ensure that the sample drawn is random and representative.

One of the ways to eliminate nonsampling risk is through:

• proper supervision and instruction of the client's employees.

• proper supervision and instruction of the audit team.

• the use of attributes sampling rather than variables sampling.

• controls which ensure that the sample drawn is random and representative.

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

• Sampling risk

• Nonsampling risk

• Audit risk

• Detection risk