AUDIT SAMPLING REVIEWER

TRUE/FALSE

1. When selecting a three-digit number from a table that is separated into columns of
five digits, it is permissible to use the first three digits, the middle three digits, or the
last three digits.
2. To determine the sample size for a test of controls, an auditor should consider the
tolerable deviation rate, the desired confidence level and the expected population
deviation rate.
3. It is impossible to draw a six-digit random number from a table that is separated into
columns of five digits.
4. Correspondence is established between the random number table and the
population by deciding the number of digits to use in the random number table and
their association with the population numbering system.
5. The process which requires the calculation of an interval and then selects the items
based on the size of the interval is random sample selection.
6. The use of an appropriate sample selection technique ensures a representative
sample.
7. The use of inappropriate audit procedures is a significant cause of non-sampling risk.
8. A sample of all items of a population will eliminate sampling risk, but increase
non-sampling risk.
9. The primary objective of using stratified sampling in auditing is to determine the
occurrence rate for a given characteristic in the population being studied.
10. Sampling risk is the risk that an auditor will reach an incorrect conclusion because a
sample is not representative of the population.
11. Auditors who prefer statistical sampling to non-statistical sampling may do so
because statistical sampling helps the auditor eliminate subjectivity in the evaluation of
sampling results.
12. Sampling risk is the risk that the audit tests will not uncover existing exceptions in a
sample.
13. Statistical sampling provides a technique for measuring the sufficiency of evidential
matter.
14. When selecting a stratified sample, the sample size is determined for each stratum
and selected randomly from the entire unstratified population.
15. The computed upper deviation rate is the sum of the sample deviation rate and an
appropriate allowance for sampling risk.
16. The auditors principal objective when using a sample of test of details of balances is
whether the transactions being audited are free of misstatements.
17. As the amount of misstatements expected in the population approaches tolerable
misstatement, the planned sample size will increase.
18. One of the ways to eliminate non-sampling risk is through the use of attributes
sampling rather than variable sampling.
19. The risk of incorrect acceptance relates to the effectiveness of the audit.
20. To determine if a sample is truly representative of the population, an auditor would
be required to use systematic sample selection.
21. If sample results indicate that that the control is operating effectively, but in fact it
is not, control risk will be assessed too high.
22. In statistical or non-statistical sampling methods used in substantive testing, an
auditor most likely would stratify a population contains both very high and very low
recorded amounts.
23. The tolerable deviation rate for a test of control s is generally lower than the
expected rate of deviations in the related accounting records
24. For a given tolerable deviation rate, a larger sample size should be selected as the
expected population deviation rate decreases.
25. Non-sampling risk is the risk that the audit tests will not uncover existing exceptions
in a sample.

IDENTIFICATION

1. A sampling plan that uses random selection of a sample and uses probability theory
to evaluate sample results, including measurement of sampling risk.
2. Any sampling plan which according to the standard, does not have the characteristics
of statistical sampling.
3. A process of dividing a population into discrete sub-populations, each which is a
group of sampling units which have similar characteristics.
4. A selection method in which the sampling unit is identified as the monetary units
that make up a transaction class or an account balance.
5. A selection that gives each sampling unit a chance to be selected.
6. A selection that does not give each sampling unit a chance of being included in the
sample.
7. The risk that involves the risk of incorrect rejection and the risk of incorrect
acceptance.
8. The risk that affects the effectiveness of the audit.
9. The risk that affects the efficiency of the audit.
10. The selection that involves selecting every nth item from the population.
11. Auditing standard that defines audit sampling.
12. It is designed to test the rate of deviation from a prescribed control procedure.
13. It is designed to test whether an account balance is materially stated.
14. An error that arises from an isolated event that has not recurred other than on
specifically identifiable occasions and is therefore not representative of similar errors in
the population.
15. Identifies the sampling unit as the individual monetary units that make up the
population.
KEY:

TRUE or FALSE
1. T
2. T
3. F
4. T
5. F
6. F
7. T
8. F
9. F
10. T
11. F
12. F
13. T
14. F
15. T
16. F
17. T
18. F
19. T
20. F
21. F
22. T
23. F
24. F
25. T

IDENTIFICATION
1. STATISTICAL SAMPLING
2. NON-STATISTICAL SAMPLING
3. STRATIFICATION
4. VALUE WEIGHTED SELECTION
5. RANDOM SELECTION
6. NON-RANDOM SELECTION
7. BETA RISK
8. BETA RISK
9. ALPHA RISK
10. SYSTEMATIC SELECTION
11. PSA 530
12. ATTRIBUTE SAMPLING
13. VARIABLE SAMPLING
14. ANOMALOUS SELECTION
15. VALUE WEIGHTED SELECTION