• QUESTION 1 Sampling risk is the risk of overreliance on the sampling result. Based on the Brony’s Bikes Module III information, which sampling method, nonstatistical or statistical, would be more appropriate to assure that obtains an objective measure of sampling risk? Statistical Nonstatistical 1 points QUESTION 2 Refer to WP C. If the upper limit of the possible deviation rate exceeds the tolerable deviation rate for any of the five attributes tested, then no further control testing is required. True False 1 points QUESTION 3 Enter the upper deviation limit from your WP C “Bill of lading not attached to packet." Enter your answer without the percent sign (%) with two decimal places. 1 points QUESTION 4 Because the auditor did not detect any errors for incorrect prices, extension and/or footing errors or quantities and/or product type not in agreement with customer order, the auditor may conclude that no further control testing of these attributes is necessary. True False 1 points QUESTION 5 Because the auditor detected attribute errors in both “customer balance within authorized credit limit” and “bill of lading not attached to packet” the auditor should consider (1) testing a different control designed to mitigate the same risk, or (2) adjust the nature, timing, and/or extent of the related substantive testing of the accounts affected by the control. True False 1 points QUESTION 6 Module IV requires you to audit a sample from the lower stratum of factory equipment additions. The upper stratum will be audited in full due to materiality of these items. The risk in this process is that items debited to factory equipment were actually repairs or maintenance items that should have been expensed when incurred with a debit to repairs and maintenance expense. If misstatements are identified you are also asked to evaluate those misstatements to determine whether the sample meets the criteria established for this testing. If the sample does not meet the criteria, among other actions, the auditor should draft correcting journal entries for the client to consider. Then the auditor should conduct the tests again with corrections recorded and determine whether the sample now meets the criteria. The objective of testing factory equipment expenditures is to determine whether the factory equipment accounts are _____________________. materially understated materially overstated properly classified fully disclosed being depreciated 1 points QUESTION 7 For this test, what is the sampling unit? number of factory equipment invoices number of items of factory equipment average dollar amount of equipment expenditures each dollar of factory expenditure 1 points QUESTION 8 For this test, what is the population? All assets all liabilities all expenditures factory equipment expenditures in the lower stratum factory equipment expenditures in the upper stratum. 1 points QUESTION 9 Refer to Module IV requirement 2 and the file named 20X9 attrib.xlsx WP 11-3A. Enter the sample size for this test. 1 points QUESTION 10 In setting the risk of incorrect acceptance of the sample findings, Derick determined that he wanted what confidence level that the upper error limit represents the maximum amount of error in the population, within the specified range of precision. 1 points QUESTION 11 Based on the materials from Module 4 used in the prior questions and WP 11.3B, “Monetary Unit Sampling Plan—Projected Misstatement, enter the amount of the projected misstatement total determined in column 6. Enter your answer without the $ or commas--just the numbers. 1 points QUESTION 12 Refer to WP 11.3C, “Computed Precision and Upper Error Limit.” Enter the amount of upper misstatement limit determined in column 3. (do not use $ or commas in your answer--just the numbers. 1 points QUESTION 13 Based on WP 11.3B and 11.3C totals used for questions 10 and 11, the sample result within Derick’s parameters appears to be acceptable. True False 1 points QUESTION 14 ______________ is the amount of error you are confident of not exceeding if no errors are detected in the sample. factual misstatement basic precision projected misstatement incremental allowance for sampling risk 1 points QUESTION 15 Refer to Module V and the file named 20X9 AR.xlsx WP 3 A, B & C. Enter the amount of credit balances in customer accounts receivable. (no $ or commas) 1 points QUESTION 16 What action do you recommend for the client to take with respect to credit balance accounts? write the credit balances off refund the amounts to the affected customers ask the customers for an order amounting to the credit balances reclassify the credit balances to a liability account 1 points QUESTION 17 Which is more reliable, a positive accounts receivable confirmation or a negative accounts receivable confirmation? these are equally reliable negative confirmation positive confirmation 1 points QUESTION 18 WP 3.C includes an amount that the client and your supervisor have agreed should be the balance in Allowance for Doubtful Accounts. WP 3.C also includes an estimate of existing uncollectible accounts. The audit adjusting entry should be based on the agreed balance in Allowance for Doubtful Accounts. The audit adjusting entry should include a (DEBIT or CREDIT ) to Bad Debts Expense in the amount of (_______________ ). Type your answer chosing Debit or Credit and then the amount. Credit $100 For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). Paragraph Arial 10pt P 0 WORDSPOWERED BY TINY 1 points QUESTION 19 The fact that a customer paid a receivable balance that was due on the reporting date 3-4 weeks after the reporting date usually provides reasonable assurance that the receivable existed on the reporting date. True False 1 points QUESTION 20 Referring to Exhibit 14, calculate the amount of sales recorded on December 30 and 31, 20X9. Calculate the approximate percentage of December 30 and 31 sales compared with all December sales. The percentage is approximately ________. 20% 2% 15% 11% not enough information to calculate this percentage 1 points QUESTION 21 Referring to your answer to question 20, which assertion related to sales revenue is most likely to be of concern to the auditor? Occurence Existence Valuation Presentation/Disclosure