QUESTION 26

1. For optimum design of controls within the sales and accounts receivable cycle, personnel maintaining the accounts receivable subsidiary ledger should not be authorizing which of the following transactions?

   	a.	payroll overtime pay.
   	b.	customer credits.
   	c.	customer account write offs.
   	d.	disbursements.

2 points

QUESTION 27

1. It is of vital importance that auditors select a sample of transaction from an audit population that is complete. The main objective is for the auditor to select ______________

   	a.	a sample that is random.
   	b.	a sample that is stratified.
   	c.	sample that is representative of the population.
   	d.	a sample that is large as possible.

2 points

QUESTION 28

1. A staff auditor is getting ready to perform a test to determine operating effectiveness for an accountig control. What is the most typical sampling technique used?

   	a.	Discovery sampling.
   	b.	Difference sampling.
   	c.	Attribute sampling.
   	d.	Probability-proportional-to-size sampling.

2 points

QUESTION 29

1. What would be the most appropriate time to use discovery sampling ?

   	a.	Potential for many errors in a set of population.
   	b.	Expectation for few errors but for critical deviations.
   	c.	The auditors have exact expectation of deviations.
   	d.	Large population sizes.

2 points

QUESTION 30

1. There are certain risks that auditor must consider when sampling. One form of sampling risk that the auditor must be aware of is:

   	a.	Selecting audit procedures that are inconsistent with the audit objective.
   	b.	Concluding that no material misstatement exists in a materially misstated population based on taking a sample that includes no misstatement.
   	c.	Failing to find an error on a sampled document that has been reviewed by the auditor.
   	d.	Failing to perform audit procedures that are required by the sampling plan.

2 points

QUESTION 31

1. An auditor determined that based on sample testing that an account is misstated. However, this conclusion was factually incorrect. This is an example of _____________________.

   	a.	incorrect acceptance.
   	b.	incorrect rejection.
   	c.	control risk too low.
   	d.	control risk too high.