Flashcards in Deck 16 Deck (20):

1

## Interbank transfer schedule

### provides evidence about bank transfers over a period of time. It is used to detect kiting, not to support the year-end cash balance.

2

## Decrease in population variability:

### Decrease sample size

3

## Increase in the risk of incorrect acceptance:

### Decrease sample size

4

## Larger tolerable misstatement:

### Decreases in sample size

5

## Sampling error =

### Recorded amount - audited amount

6

## Tainting factor =

### sampling error/recorded amount

7

## Projected misstatement =

### sampling interval x tainting factor

8

## What affects sample size?

### Variability in the population (generally represented by the standard deviation), the acceptable level of risk (i.e., the risk of incorrect acceptance), the tolerable misstatement, and the expected misstatement.

9

## Attribute sampling is used to:

### Test controls (Controls often relate to authorization, validity, completeness, accuracy, appropriate classification, accounting in conformity with GAAP, and proper period)

10

## Sample size in an attribute sampling application is affected by:

### Allowable risk of assessing control risk too low, the tolerable deviation rate, and the expected deviation rate

11

## Upper deviation rate =

### Sample deviation rate plus an allowance for sampling risk

12

## Risk of assessing control risk too high:

### Risk that the assessed level of control risk based on the sample is greater than the true risk based on the actual operating effectiveness of the control

13

## What kind of sampling is used to estimate a numerical measurement of a population?

### Variables sampling

14

## Variables sampling is used for:

### Substantive testing

15

## Allowance for sampling risk =

### Excess of the upper deviation rate over the sample deviation rate

16

## Variables sampling is used to:

### Determine whether a given account balance is reasonable

17

## Primary objective of PPS sampling:

### Identify overstatement errors (emphasizes larger items)

18

## Attribute sampling deals with:

### Yes or no questions

19

## Direct relationship between expected deviation rate and:

### Sample size

20