Reference no: EM133272685

1. Big data techniques (data analytics) are not used as widespread in auditing as they are in other areas of accounting.

True

False

2. When the audit staff has to decide to use a statistical rather than a non-statistical sample, the main disadvantage is ________.

it is more difficult to design efficient samples

the costs may be higher to train staff

sampling without replacement has to be a part of the process

it is impossible to objectively evaluate results

3. Audit staffs use un-stratified mean-per-unit sampling in order to audit accounts receivable just as they did in the past year. Which of these changes in specification or characteristics results in a sample size that is larger than the prior year?

Variance is larger in the dollar value of accounts

Tolerable misstatement is larger

Incorrect acceptance has a higher risk

Population size is smaller

4. Which one of the following situations results in the audit staff concluding that the risk of material misstatement is too high when they use non-statistical sampling to perform substantive tests?

The sample net misstatement is exceeded by the amount of the tolerable misstatement

The risk of incorrect rejection is exceeded by the risk of incorrect acceptance

The projected misstatement surpasses the allowance for sampling risk

The tolerable misstatement is exceeded by the projected misstatement

5. The risk of incorrect rejection and assessing control risk being too high during assessing sampling risk refer to the ________.

audit efficiency

audit effectiveness

sample selection

quality controls of the audit

6. Which of the preceding is not normally used to select samples?

number generated at random

selection that is systematic

Physical representation numbers

Random number tables

7. Which statistical sampling technique involve taking samples in a series of stages?

Sequential sampling

Multiple location sampling

Discovery sampling

Systematic sampling

8. Stratification of the population typically results in a more effective sampling plan.

True

False

9. Which is a part of sampling risk?

The auditor failing to detect an error which exists on a document they have inspected.

Making the choice of an audit procedure which is inconsistent with the objectives of the audit.

The auditor fails to perform audit procedures which are included as part of the sampling plan.

Making a conclusion where no material misstatement is present in a materially misstated population using a sample that has no misstatements as part of its population.

10. Auditors may not use big data (data analytics) in their audits because they do not want to use more advanced technology than their auditors.

True

False