sampling notes

Question 1

when testing every nth item find the total misstatement by

Answer 1

1/# of items = percentage

individual misstatement/%

Question 2

sample size varies directly w/

Answer 2

VARIABILITY OF THE POPULATION

Question 3

determination of sample size for a test of attributes is a function

Answer 3

1) the allowable risk of overreliance,
(2) the tolerable deviation rate,
(3) the expected population deviation rate, and
(4) the size of the population.

Question 4

SAMPLE SIZE AND POPULATION SIZE

Answer 4

DIRECT BUT NOT AT A QUICK RATE

Question 5

NON SAMPLING RISKS

sampling risk

Answer 5

inappropriate audit procedures or misinterpretation of audit evidence and failure to recognize a misstatement or deviation.

sample does not effectively represent population

Question 6

MUS
Mean per Unit
Ratio/Difference

Answer 6

1 - large sample w/ large mistatements (overstatements,assets)
2 - sample size to large to be cost effective
3 - small misstatements that don’t threaten materiality
Ratios of book carrying to audit estimates

Question 7

over under RELIANCE

Answer 7

ATTRIBUTE TESTING

Question 8

INCORRECT ACCEPTANCE

Answer 8

VARIABLE TESTING

Question 9

SAMPLING FOR SUB PROCEDURES

Answer 9

1 - PROJECT MISSTATEMENT
2 - DETERMINE TOLERABLE MISSTATEMENT
3 - SELECT SAMPLE

Question 10

attribute sampling

tolerable deviation cannot exceed

Answer 10

actual deviation + allowance for sample risk

Question 11

terms used for variable and attribute related to

Answer 11

EFFECTIVENESS

Question 12

acheived upper deviation limit

Answer 12

over reliance risk
sample size
actual deviations

cannot exceed to tolerable misstatement

Question 13

allowance for sampling risk

Answer 13

upper deviation - actual deviation

Question 14

attribute sampling never includes

Answer 14

tolerable misstatement

only

tolerable population deviation

Question 15

systematic sampling

Answer 15

taking every nth number

Question 16

occurrence in attribute testing

conclusion

Answer 16

how much a characteristic shows up

relationship of deviation and misstatement

Question 17

mean per unit
sampling interval

test amount

Answer 17

tm / reliability factor

total population/sampling interval

Question 18

deviation of two strata what is total population deviation

Answer 18

higher than that of the higher strata

Question 19

MUS sample size

Answer 19

total account amt * chart item/ tolerable misstatement * expected misstatement

if tolerable misstatement not given

Question 20

mus
sample interval is less than account amt

sampling interval is greater than account amount

Answer 20

account amount - audited amount = projected misstatement

recorded amt- audited amt/recorded amount * sampling interval

Question 21

probability portional to size

Answer 21

selects samples based on size; good for overstatements