Audit Testing and Sampling Methodologies AAIA Practice Questions (Page 4)

Questions 16–20

1. 16foundation · easy

   When evaluating sample results, what does the auditor do to project errors to the population?

   • AReperform the audit procedures on the entire population
   • BCompare the sample error rate to the tolerable error rate
   • CAdjust the sample size to reduce the error rate
   • DExtrapolate the sample error to the entire population
   Reveal Solution Discussion Select an answer first
2. 17foundation · easy

   How does stratification improve sampling efficiency?

   • ABy eliminating the need for random selection
   • BBy reducing the variability within each stratum, allowing for a smaller sample size
   • CBy increasing the sample size for all strata
   • DBy ensuring that all items are tested
   Reveal Solution Discussion Select an answer first
4. 18foundation · easy

   What is attribute sampling primarily used for?

   • AEstimating the monetary amount of misstatement in an account balance
   • BSelecting a sample of transactions for substantive testing
   • CProjecting the total error in a population to determine materiality
   • DTesting the effectiveness of internal controls by estimating the rate of deviation
   Reveal Solution Discussion Select an answer first
5. 19foundation · easy

   Which of the following is a common application of variables sampling?

   • AEstimating the total dollar amount of misstatement in an accounts receivable balance
   • BTesting whether all sales orders have been approved
   • CSelecting a random sample of transactions for review
   • DDetermining the tolerable error rate for a control
   Reveal Solution Discussion Select an answer first
6. 20foundation · easy

   Which of the following factors would most likely increase the required sample size?

   • AA higher tolerable error rate
   • BA lower expected error rate
   • CA lower acceptable level of sampling risk
   • DA smaller population size
   Reveal Solution Discussion Select an answer first