Question: The use of statistical sampling techniques in an audit of financial statements does not eliminate judgmental decisions. a. Identify and explain four areas in which

The use of statistical sampling techniques in an audit of financial statements does not eliminate judgmental decisions.
a. Identify and explain four areas in which judgment may be exercised by CPAs in planning
a statistical test of controls.
b. Assume that the auditors’ sample shows an unacceptable deviation rate. Discuss the various actions that they may take based upon this finding.
c. A nonstratified sample of 80 accounts payable vouchers is to be selected from a population of 3,200. The vouchers are numbered consecutively from 1 to 3,200 and are listed, 40 to a page, in the voucher register. Describe four different techniques for selecting a random sample of vouchers for inspection.

Step by Step Solution

★★★★★

3.36 Rating (168 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a Areas requiring the auditors to make judgment decisions when statistical sampling techniques are employed only four required 1 Defining the population characteristics to be tested and deviations Unl... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

336-B-A-A-A-N (1002).docx

120 KBs Word File

Students Have Also Explored These Related Auditing Questions!

A random sample is to be selected from a population that has a proportion of successes p = .65. Determine the mean and standard deviation of the sampling distribution of p^ for each of the following...

A random sample is to be selected from a population that has a proportion of successes p = 0.65. Determine the mean and standard deviation of the sampling distribution of p for each of the following...

A sample of 50 items is to be selected from a batch consisting of 5000 items. The batch will be accepted if the sample contains at most one defective item. Calculate the probability of lot acceptance...

The use of statistical sampling techniques in an audit of financial statements does not eliminate judgmental decisions. Identify and explain four areas in which judgement may be exercised by CPAs in...

What influences the auditor's assessment of tolerable misstatement? Explain the advantages and disadvantages of using probability-proportionate-to-size sampling when testing the existence of accounts...

AUDIT QUESTION The use of statistical sampling techniques in an audit of financial statements does not eliminate judgmental decisions. Required a. Identify and explain four areas in which judgment...

The use of statistical sampling techniques in an audit of financial statements does not eliminate judgmental decisions. Required 1. Identify and explain four areas in which judgment may be exercised...

The use of statistical sampling techniques in an audit of financial statements does not eliminate judgmental decisions. Required: a. Identify and explain four areas in which judgment may be exercised...

9 4 4 . The use of statistical sampling techniques in an audit of financial statements does not eliminate judgmental decisions. a . Identify and explain four areas in which judgment may be exercised...

The use of statistical sampling techniques in an audit of financial statements does not eliminate judgmental decisions. Required: Identify and explain four areas in which judgment may be exercised by...

Solution: in infinile de! and Countable IR-z i an infinide ded and unounkable fol c) 7 intinite and Counable fet .in an it in Tul. 7-81.3,41 in on infinide fel and coumbedlo go] (ounkable Hunu il in...

to uninstall the equipment and restore the installation site at the end of the equipment's 8-year useful life, a process which Straw Co. estimates to cost about P4,000,000. The appropriate pre-tax...

Which of the following is / are correct regarding SIMPLE plans? 1 . A SIMPLE plan does not require annual testing. 2 . A SIMPLE IRA must follow a 3 - year cliff vesting schedule if the plan is top -...

For previous years 4, 5, and 6, student enrollment was 761, 757, and 752, respectively. How should you address the possibility of a decrease in your budgetary allotment? What methods would you apply...

Among specific procedures that contribute to good internal control over the business processes related to accounts receivable are (a) the approval of uncollectible account write-offs and credit...

Your review of notes receivable from officers, directors, stockholders, and affiliated companies discloses that several notes of small amounts were written off to the allowance for uncollectible...

Balloons By Sunset (BBS) is consideting the purchase of two new hot air balloons so that it can expand its desert sunset tours, Various information about the proposed investment follows: (Euture...

Wii Brothers, a game manufacturer, has a new idea for an adventure game. It can market the game either as a traditional board game or as an interactive DVD , but not both. Consider the following cash...

For an interest rate of 2% per quarter, compounded continuously, the effective semiannual interest rate is closest to A. Less than 4.0% B. 4.02% C. 4.12% D. Over 4.25% A steel fabrication company...