Substantive Evidence (Statistical sampling)

Question 1

attribute sampling

Answer 1

concerned with proportion of a population that either has or does not have a particular attribute

Question 2

attribute sampling done in multiple ways

Answer 2

• hypergeometric
• binomial
• poisson

Question 3

hypergeometric

Answer 3

sampling without replacement from a population of finite size. Probability of finding an error depends on the attributes of previous selected units

Question 4

binomial

Answer 4

sampling from infinite population or without replacement

Question 5

poisson

Answer 5

continuous population where error probability is very small (example probability of car accident)

Question 6

upper precision limit

Answer 6

the level of possible error/audit difference in the population being tested at a particular risk level

Question 7

difference monetary unit sampling and attribute sampling

Answer 7

monetary unit (each euro in population) and physcial unit (invoice)

Question 8

MUS

Answer 8

to determine whether an account balance is materially misstated. Random selection of montary units from a population and results in a sampling comprising the physical items within which the selected montary units reside (recognized as the preferred substantive sampling method for auditors in most circumstances)

Question 9

MUS advantages

Answer 9

• emphasizes larger balances
• several samples tested in one item
• easy to apply

Question 10

MUS disadvantages

Answer 10

• negative and zero balances can not be selected