1 Which of the following would be an example of sampling error?

a. The auditor chose a random sample and divided the number of errors in the sample by the number of accounts in the sample to calculate the sample error rate.

b. The auditor chose a random sample, calculated a sample error rate of 4%, and concluded that the population error rate was 4%. The true population error rate was 6%.

c. The auditor chose a non-random sample to focus on transactions for only 2 months of the year.

d. The auditor selected a non-random sample and generalized the sample results to the population using statistical methods.

2 Generally, which of the following audit procedures is most reliable?

a. Observation

b. Recalculation

c. Inspection

d. Inquiry

3 Inspection involves examining records or documents, whether internal or external, in paper form, electronic form, or other media, or a physical examination of an asset. Evaluate whether each of the following statements qualifies as inspection:

I. test performed on 100% of the items within a population

II. selecting items over a certain amount

III. selecting items for the total population on the basis that was expected to be representative

a. l and Il do not qualify: Ill qualifies

b. I and Il qualify: III does not qualify

c. I, ll and Ill qualify

d. I, ll and III do not qualify