Understanding Audit Sampling and ISA

What is the primary purpose of audit sampling?

• To identify potential fraud in accounting records.

• To draw conclusions about a population based on a representative subset.

• To ensure compliance with legal regulations.

• To verify the accuracy of financial statements.

Which ISA standard primarily addresses audit sampling?

• ISA 400

• ISA 300

• ISA 200

• ISA 530

Match the following statements about statistical and non-statistical sampling.

• Non-statistical sampling may introduce bias.

• Statistical sampling is always biased and non-statistical is random.

• Non-statistical sampling is subjective.

• Non-statistical sampling allows for inference while statistical does not.

• Statistical sampling allows for inference.

• Statistical sampling is subjective and non-statistical is objective.

• Statistical sampling is random.

• Statistical sampling is random and allows for inference, while non-statistical sampling is subjective and may introduce bias.

What is the term for the risk that the sample does not represent the population?

• sampling error

• data distortion

• sampling bias

• population bias

What is the significance of sample size in audit sampling?

• Sample size determines the cost of the audit.

• The significance of sample size in audit sampling is that it impacts the accuracy and reliability of audit conclusions.

• Larger sample sizes always lead to faster audits.

• Sample size is irrelevant to audit effectiveness.

Match the following sampling methods with their descriptions.

• Dividing the population into groups and randomly selecting some groups

• Systematic sampling

• Choosing every nth individual from a list

• Stratified sampling

• Selecting individuals completely at random

• Random sampling

• Dividing the population into subgroups and sampling from each

• Cluster sampling

What does the term 'tolerable misstatement' refer to in audit sampling?

• The average misstatement found in previous audits.

• The maximum amount of misstatement an auditor is willing to accept in a financial statement.

• The minimum level of accuracy required in financial statements.

• The total amount of misstatement allowed in an audit report.

Match the following statements about how auditors determine sample size with the correct descriptions.

• The auditor's choice is based on individual liking.

• The auditor uses a fixed sample size regardless of the audit objectives.

• The sample size is tailored to specific audit needs and conditions.

• The auditor selects the sample size based on the client's budget constraints.

• The sample size remains constant for all audits.

• The auditor determines the sample size based on audit objectives, population size, risk levels, and expected error rates.

• The sample size is influenced by financial limitations.

• Sample size is determined solely by the auditor's personal preference.

What is the role of professional judgment in audit sampling?

• Professional judgment is only needed for financial statement analysis.

• Evidence evaluation is not influenced by the auditor's experience.

• Professional judgment is crucial in determining sample size, selection, and evaluating evidence in audit sampling.

• Sample size is determined solely by statistical formulas without judgment.

The impact of population size on sampling methods is that (a)   .

• Smaller populations need more compl
• Population size has no effect on sa
• Larger populations may require more
• Larger populations always require s