A3 Flashcards
1
Q
What is the ultimate purpose of assessing control risk?
A
To contribute to the auditors evaluation of the risk that material misstatements exist in the FS
2
Q
define control risk
A
Risk that a material misstatement could occur in a relevant assertion will not be prevented or detected (and corrected) on a timely basis by the entity’s internal control
3
Q
how is stratified MPU more efficient than unstratified MPU
A
generally more efficient since population is classified in a manner that emphasizes the high value items. Results in an estimate having a desired level of precision with smaller sample size
4
Q
What is the primary objective of probability proportional to sample size?
A
method designed to estimate overstatement errors
