AUD 5

Question 1

The sample size in attribute sampling is affected by?

Answer 1

The allowable risk of assessing control risk too low, the tolerable rate of deviation, and the expected rate of deviation.

Question 2

The sample size is variable sampling application is affected by?

Answer 2

The variability in the population (standard deviation), the acceptable level of risk (risk of incorrect acceptance), the tolerable misstatement, and expected misstatement.

Question 3

Attribute sampling is used to?

Answer 3

Test controls. It is often a yes-no question.

Question 4

Variable sampling is normally used to estimate?

Answer 4

A numerical measurement of a population.

Question 5

Ratio estimation is more effective when?

Answer 5

There is a correlation between book value and audit amounts.

Question 6

PPS is a technique that is designed to?

Answer 6

Identify overstatement errors.

Question 7

Significant deficiency exists when?

Answer 7

For weaknesses that are important enough to merit the attention of management.

Question 8

Material weakness exists when?

Answer 8

When there is a reasonable possibility of a material misstatement.

Question 9

What is the purpose of the management rep letter?

Answer 9

Is to confirm management’s oral evidence supplied during the engagement