Question
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
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
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