Audit Testing and Sampling Methodologies AAIA Practice Questions (Page 6)

Questions 26–30

1. 26application · medium

   An AI auditor is testing a model that recommends personalized product prices. The auditor selects a random sample of 1,000 transactions and reviews them for pricing errors. The auditor finds no errors in the sample and concludes that the pricing model is accurate. Which of the following is the MOST significant risk to this conclusion?

   • ANon-sampling risk, because the auditor may have misapplied the audit procedure.
   • BInherent risk, because the pricing model is complex and may have hidden errors.
   • CDetection risk, because the auditor may not have the right tools to find errors.
   • DSampling risk, because the sample may not be representative of the population even though it was randomly selected.
   Reveal Solution Discussion Select an answer first
2. 27application · medium

   An AI auditor is examining a fraud-detection model's output to determine whether the model correctly flags fraudulent transactions. The auditor has access to a data analytics tool that can generate random samples and compute confidence intervals. The auditor needs to quantify the risk that the sample results differ from the true population characteristics. Which approach should the auditor use?

   • AJudgmental sampling, because the auditor can use professional judgment to select the most suspicious transactions.
   • BNon-statistical sampling, because it is simpler and requires less training to apply.
   • CStatistical sampling, because it allows the auditor to measure sampling risk and project results with a quantified level of confidence.
   • D100% examination of all transactions, because it eliminates all sampling risk.
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4. 28foundation · easy

   Why is it important to document the sampling methodology in the audit workpapers?

   • ATo allow another auditor to understand and reperform the sampling procedures
   • BTo prove that the sample was selected without any errors
   • CTo provide a record of the auditor's personal judgment
   • DTo satisfy the client's request for documentation
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5. 29foundation · easy

   What is the purpose of comparing the projected error to the tolerable error?

   • ATo determine if the sample size was adequate
   • BTo determine the acceptable level of sampling risk
   • CTo decide whether to use statistical or non-statistical sampling
   • DTo assess whether the population is materially misstated
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6. 30application · medium

   An auditor is testing whether an AI-powered invoice-processing system has overstated the total value of accounts payable. The population consists of 10,000 invoices with a total book value of $5,000,000. The auditor wants to detect any material overstatement in the account balance. Which sampling technique is most appropriate for this objective?

   • ABlock selection of all invoices from the first quarter of the year.
   • BHaphazard selection of 200 invoices to review for errors.
   • CMonetary unit sampling (MUS), where each dollar in the population has an equal chance of selection.
   • DAttribute sampling to estimate the percentage of invoices that contain any error.
   Reveal Solution Discussion Select an answer first