samp Worksheet

Identify the following statement: The application of audit procedures to less than 100% of items within a population.

• Key Item Testing

• Statistical sampling

• Sampling

• Non-statistical sampling

When are auditors allowed to use judgment?

I. Determination of sample size
II. Selection of the sample

• I only

• Both I and II

• Neither I nor II

• II only

Identify the following statements:
I. The risk that the auditor reaches an erroneous conclusion for any reason not related to sampling risk
II. A misstatement or deviation that is demonstrably not representative of misstatements or deviations in a population

• Sampling risk, non-sampling risk

• Non-sampling risk, sampling risk

• Anomaly, sampling risk

• Non-sampling risk, anomaly

In which of the following situations would the auditor perform 100% testing (choose the exception)

• The population constitutes a small number of large volume items.

• When both inherent and control risks are high and other means do not provide sufficient appropriate audit evidence.

• The population constitutes a large number of small volume items.

• The repetitive nature of a calculation or other process performed automatically by an information system makes a 100% examination cost effective.

Which of the following statements about specific item testing is false?

• It is selective.

• It can be an efficient means of gathering audit evidence.

• It does not constitute sampling.

• The results of audit procedures applied to items selected in this way can be projected to the entire population.

S1: Audit sampling is the application of audit procedures to less than 100% of items within a class of transactions or account balances such that all sampling units have a chance of selection.
S2: Sampling unit is the individual items constituting a population
S3: Population is the entire set of data from which a sample is selected and about which the auditor wishes to draw conclusions.

• True, false, false

• False, true, true

• False, false, true

• True, true, true

S1: Random sample is a sample in which every possible combination of items in the population has an equal chance of constituting the sample
S2: Representative sample is a sample in which the characteristics in the sample are the same as those of the population.

• True, false

• False, true

• False, false

• True, true

Which of the following does not involve audit sampling?

• Test of details of transactions applied as a test of control.

• Test of details of transactions applied as a substantive test.

• Test of details of balances.

• Substantive analytical procedure.

The population from which samples will be drawn:

• Should be appropriate to the objective of the audit procedure, which will include consideration of the direction of testing.

• Should be complete.

• May be stratified.

• All of the above.

Which of the following explanations best describes the distinguishing feature of statistical sampling?

• It allows the auditor to have the same degree of confidence as with judgment sampling but with substantially less work.

• It allows the auditor to substitute sampling techniques for audit judgment

• It provides for measuring mathematically the degree of uncertainty that results from examining only a part of the data.

• It provides for measuring the actual misstatements in financial statements in terms of reliability and precision.