Which of the following does not have to be considered in determining the initial sample size...
Which of the following does not have to be considered in determining the initial sample size of a test of details? Acceptable risk of incorrect rejection Acceptable audit risk Estimate of misstatements in the population Tolerable misstatement
Homework Answers
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Answer)Acceptable risk of incorrect rejection Acceptable risk of incorrect rejection does not have to be considered in determining the initial sample size of a test of details. |
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Which of the following does not have to be considered in determining the initial sample size...
When selecting a sample size for substantive tests of balances which factor, other factors being equal,...
When selecting a sample size for substantive tests of balances which factor, other factors being equal, would result in a larger sample? An increase in the tolerable misstatement An increase in the acceptable risk of incorrect acceptance Small expected misstatements A decrease in the tolerable misstatement
Chapter 9 Audit Sampling 1.Three factors that determine the sample size are the risk of assessing...
Chapter 9 Audit Sampling 1.Three factors that determine the sample size are the risk of assessing control risk too high, tolerable deviation rate, and the expected population deviation rate. a. True b.False 2.While performing a substantive test of details during an audit, the auditor determined that the sample results supported the conclusion that the recorded account balance was materially misstated. It was, in fact, not materially misstated. This situation illustrates the risk of a. Incorrect rejection b. Incorrect acceptance c....
Which of the following situations will result in the auditors concluding that the risk of material...
Which of the following situations will result in the auditors concluding that the risk of material misstatement is too high when using non-statistical sampling for substantive tests? The projected misstatement exceeds the tolerable misstatement. The allowance for sampling risk exceeds the projected misstatement. The risk of incorrect acceptance exceeds the risk of incorrect rejection. The tolerable misstatement exceeds the sample net misstatement.
1. If a risk of incorrect acceptance of 15% is specified in the sample design, the...
1. If a risk of incorrect acceptance of 15% is specified in the
sample design, the sampling interval is $2,000, and five
misstatements are found as enumerated above, calculate:
Basic precision.
The incremental allowance for sampling risk.
The upper misstatement limit.
2. If tolerable misstatement were $50,000 and expected
misstatement were $10,000, what conclusion would you reach based on
your results in above?
AP10.8 (LO 8) Challenging Evaluating a PPS sample Assume the following misstatements were found in a PPS...
You are the auditor of Jexel, an auto air-conditioner service and repair company, and you have...
You are the auditor of Jexel, an auto air-conditioner service and repair company, and you have decided to use the mean-per-unit method to test the existence and gross valuation of recorded accounts receivable. The client's records include 9,600 accounts with a total book value of $1,270,000. You decide to use tolerable misstatement of $217,000, an incorrect acceptance risk of 20 percent, and an incorrect rejection risk of 15.0 percent. Using Excel, you estimated the standard deviation of the population as...
Which of the following factors is least likely to influence the auditor’s determination of an appropriate...
Which of the following factors is least likely to influence the auditor’s determination of an appropriate sample size when testing the existence assertion for inventory? Group of answer choices Acceptable risk of incorrect acceptance Anticipated misstatement Tolerable misstatement Allowance for sampling risk Book value of the inventory account
Only b and c. Thank you! AP10.8 (LO 8) Evaluating a PPS sample Assume the following...
Only b and c. Thank you!
AP10.8 (LO 8) Evaluating a PPS sample Assume the following misstatements were found in a PPS sample: Sample Item Book Value Audit Value $ 650 540 1,900 2,200 2,800 $ 585 0 0 1,650 2,660 Required a. Calculate the projected misstatement assuming: • The sampling interval was $1,800. The sampling interval was $ 2,000. b. If a risk of incorrect acceptance of 15% is specified in the sample design, the sampling interval is $2,000,...
You are the auditor of Jexel, an auto air-conditioner service and repair company, and you have de...
You are the auditor of Jexel, an auto air-conditioner service and repair company, and you have decided to use the mean-per-unit method to test the existence and gross valuation of recorded accounts receivable. The client's records include 10,200 accounts with a total book value of $1,275,000. You decide to use tolerable misstatement of $162,000, an incorrect acceptance risk of 10 percent, and an incorrect rejection risk of 5.0 percent. Using Excel, you estimated the standard deviation of the population as...
Which of the following is used in attribute sampling to determine the sample size? a) Sampling...
Which of the following is used in attribute sampling to determine the sample size? a) Sampling risk, sample deviation rate, and tolerable deviation rate. b) Sampling risk, sample deviation rate, and expected population deviation rate. c) Sampling risk, tolerable deviation rate, and expected population deviation rate. d) Sample deviation rate, tolerable deviation rate, and expected population deviation rate.
The following information relates to a nonstatistical sample used for a price test of inventory: What...
The following
information relates to a nonstatistical sample used for a price
test of inventory:
What is the best estimate of
the total misstatement?
Are these results acceptable,
assuming tolerable misstatement is $25,000? Explain.
Assume that the results are
not acceptable. What possible courses of action can the auditor
take?
1. If a risk of incorrect acceptance of 15% is specified in the
sample design, the sampling interval is $2,000, and five
misstatements are found as enumerated above, calculate:
Basic precision.
The incremental allowance for sampling risk.
The upper misstatement limit.
2. If tolerable misstatement were $50,000 and expected
misstatement were $10,000, what conclusion would you reach based on
your results in above?
AP10.8 (LO 8) Challenging Evaluating a PPS sample Assume the following misstatements were found in a PPS...
You are the auditor of Jexel, an auto air-conditioner service and repair company, and you have decided to use the mean-per-unit method to test the existence and gross valuation of recorded accounts receivable. The client's records include 9,600 accounts with a total book value of $1,270,000. You decide to use tolerable misstatement of $217,000, an incorrect acceptance risk of 20 percent, and an incorrect rejection risk of 15.0 percent. Using Excel, you estimated the standard deviation of the population as...
Only b and c. Thank you!
AP10.8 (LO 8) Evaluating a PPS sample Assume the following misstatements were found in a PPS sample: Sample Item Book Value Audit Value $ 650 540 1,900 2,200 2,800 $ 585 0 0 1,650 2,660 Required a. Calculate the projected misstatement assuming: • The sampling interval was $1,800. The sampling interval was $ 2,000. b. If a risk of incorrect acceptance of 15% is specified in the sample design, the sampling interval is $2,000,...
You are the auditor of Jexel, an auto air-conditioner service and repair company, and you have decided to use the mean-per-unit method to test the existence and gross valuation of recorded accounts receivable. The client's records include 10,200 accounts with a total book value of $1,275,000. You decide to use tolerable misstatement of $162,000, an incorrect acceptance risk of 10 percent, and an incorrect rejection risk of 5.0 percent. Using Excel, you estimated the standard deviation of the population as...
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