AUD 3

Question 1

The auditor uses the assessed level of “control risk” to…

Answer 1

Determine the acceptable level of “detection risk” for the financial statement assertions

Question 2

The auditor uses the assessed level of “control risk” to…

Answer 2

Determine the acceptable level of “detection risk” for the financial statement assertions

Question 3

Which of the following is a mgt assertion regarding account balances at period end?

Answer 3

“the entity holds or controls the rights to assets and liabilities are obligations of the entity” are mgt assertions that relate to the “rights and obligations” assertion “about account balances at period end”

Question 4

transactions recorded at proper “accounts” =

Answer 4

understandability and classification assertion

Question 5

Amounts and other data pertaining to “transactions and events” have been “recorded appropriately” is a statement that relates to?

Answer 5

valuation, allocation, and accuracy assertion about transactions and events

Question 6

The sampling size is affected by the allowable risk of

Answer 6

assessing control risk too low, the tolerable deviation rate, and the expected deviation rate

Question 7

The risk of incorrect acceptance and the risk of assessing control risk too low relate to>

Answer 7

the effectiveness of the audit in detecting an existing material misstatement

Question 8

The risk of incorrect rejection and the risk of assessing control risk too high relate to?

Answer 8

the efficiency of the audit

Question 9

The sample size of a test of controls varies “inversely” with?

Answer 9

Tolerable rate, NOT expected population deviation rate

Question 10

Variables sampling is usually used to test

Answer 10

numerical quantity or balances

Question 11

Attributes testing usually tests

Answer 11

rate of occurrence or yes no answers

Question 12

Attributes testing usually tests

Answer 12

rate of occurrence or yes no answers

Question 13

there is a “direct” relationship between sample size and

Answer 13

“expected” error rate

Question 14

Variables sampling is normally used to estimate a numerical measurement of a population

Answer 14

Attribute sampling is used when testing controls as part of the auditors evaluation of a company’s internal control

Question 15

Variables sampling is normally used to estimate a numerical measurement of a population

Answer 15

Attribute sampling is used when testing controls as part of the auditors evaluation of a company’s internal control