View Policies Current Attempt in Progress Which of the following are true with respect to sampling? [Several choices may be correct.) D A. Judgemental selection is a statistical sampling technique. D B. Sampling risk is an element of audit risk. [3 C. Stratication can be used after random selection to improve audit efciency. [3 D. When testing controls, sampling risk is the risk that an auditor concludes that a material misstatement does not exist when it does or an auditor concludes that a material misstatement exists when it does not. [3 E. Sampling risk is the risk that the auditor forms an inappropriate conclusion due to sampling. D F. Tolerable error is dened as the maximum error an auditor is willing to accept within the population tested. [3 G. Sampling risk is the result when the auditor spends too little time testing the accounts most at risk of material misstatement. Current Attempt in Progress Min Li is auditing RRR Services Inc. and has designed the following tests: 1. Select 150 cancelled cheques [8 percent of the total number of cheques) at random from the cash disbursement journal for the year. 2. Ignore any cheques with a recorded value of less than $1,000. 3. Examine the cancelled cheques to verify if they have been approved by the accounting supervisor (indicated by her initials on the cheque). 4. Compare the percentage of cheques (of the sample} that lacks the accounting supervisor's initials to a predetermined percentage of 5 percent. Which of the following statements accurately describe this test? (Several choices may be correct.) Cl Min has designed a substantive test of details Cl Min has designed a test of control U The results of the test can be used to project avalue for the entire population Cl The attribute being tested is proper approval Cl lfthe percentage of cheques lacking approval is greater than 5 percent, the auditor will conclude the control is operating effectively Cl The results of the test cannot be used to project a value for the entire population Current Attempt in Progress Which of the following would be examples of substantive procedures? (Several choices may be correct.) O A. Inspecting documents to verify the date of transactions around year end O B. Inspecting suppliers' invoices to verify amounts purchased O C. Inspecting documents for evidence of authorization O D. Inspecting documents for evidence that details included have been checked by appropriate client personnel O E. Observing client personnel performing various tasks, such as preparing bank deposits and conducting an inventory count O F. Inquiry of client personnel about how they perform their tasks O G. Recalculating an interest expense using the confirmed interest ratesView Policies Current Attempt in Progress The results of substantive testing of sales invoices at City Electronics are shown in table 6.8. The three strata correspond to different departments, and the overall tolerable error is set at $40,000. Stratum Error Found Sample Total Value Stratum Total Value Projected Error 1 $7,930 $101,170 $128,660 2 $3,290 $41,990 $76,830 3 $8,600 $62,840 $162,280 Total $ 19.820 $206,000 $367.7 70 (a) Project the errors for each stratum and calculate the total projected error. {Round answers to 0 decimal places. 8.3". 5,275.) Stratum Error Found Sample Total Value Stratum Total Value Projected Error 1 $7,930 $101,170 $128,660 $ 2 $3,290 $41,990 $76,330 $ 3 $8,600 $62,840 $162,280 $ Total $19,820 $206,000 $367,770 $ eTextbook and Media Save for Later Attempts: 0 of 3 used