Final Review III Flashcards
1
Q
What is attribute sampling?
A
estimate a rate of occurrence, mostly used to test internal control
2
Q
what is variable sampling?
A
estimate numerical value typically used in substantive testing
- MPU
- ratio estimation
- difference estimation
3
Q
what is PPS sampling
A
hybrid method that uses attribute sampling theory to express a conclusion in dollar amounts
4
Q
What is the confidence interval?
A
percentage chance you got it right
5
Q
What are the sampling risks in test of controls, attribute sampling?
A
- risk of assessing control risk too low
- risk of assessing control risk too high
6
Q
What are the sampling risks of substantive testing?
A
- risk of incorrect acceptance
- risk of incorrect rejection
7
Q
What is the effect of sampling risk on the audit?
A
effectiveness and efficiency
