Reference no: EM132775456

Problem 1: Which of the following is true about sampling and non-sampling risks?

A. Sampling risk can be reduced by increasing sample size.

B. Sampling risk cannot be eliminated.

C. Non-sampling risk can be eliminated by proper engagement planning, supervision, and review.

D. Non-sampling risk arises from the possibility that the auditor's conclusion, based on a sample may be different from the conclusion reached if the entire population were subjected to the same audit procedure.

Problem 2:  An advantage of statistical sampling over nonstatistical sampling is that statistical sampling helps an auditor to

A. Minimize the failure to detect errors and frauds.

B. Eliminate nonsampling risk.

C. Reduce the level of audit risk and materiality to a relatively low amount.

D. Measure the sufficiency of the evidential matter obtained.

Problem 3: The tolerable rate of deviations for a test of controls is generally

A. Lower than the expected rate of errors in the related accounting population.

B. Higher than the expected rate of errors in the related accounting records.

C. Identical to the expected rate of errors in the related accounting records.

D. Unrelated to the expected rate of errors in the related accounting records.