Auditing

5-1. Which of the following statements about the comparative advantages of statistical sampling vs. nonstatistical sampling is accurate? a. Unlike statistical sampling, nonstatistical sampling doesnt require consideration of sampling risk. b. Unlike nonstatistical sampling, statistical sampling enables the auditor to quantify sampling risk. c. Unlike statistical sampling, nonstatistical sampling results in a sample size that is quite small. d. Unlike nonstatistical sampling, statistical sampling involves no professional judgment.

5-2. An auditor believes that the expected error rate is just below the tolerable error rate; therefore, the auditor should decide . . . a. that Type I risk is low. b. that a small sample size is needed. c. not to place reliance on internal controls. d. not to perform statistical sampling procedures.

5-3. An auditor believes that the expected error rate exceeds the tolerable error rate; therefore, the auditor should decide . . . a. that Type II risk is high. b. that a large sample size is needed. c. not to place reliance on internal controls. d. not to perform statistical sampling procedures.