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Question(s) / Instruction(s):

Acceptable risk of incorrect acceptance is of greater concern to the auditor than acceptable risk of

Incorrect rejection.

a)            TRUE

b)            FALSE

2) Non-sampling error occurs when audit tests do not uncover existing exceptions in the sample

a)            TRUE

b)            FALSE

 

3) It is equally acceptable under professional auditing standards for auditors to use either statistical

or non-statistical sampling methods.

a)            TRUE

b)            FALSE

 

4) In systematic sample selection, the interval is determined by dividing the sample size by the

desired population size.

a)            TRUE

b)            FALSE

 

5) Acceptable risk of assessing control risk too low (ARO) and allowable risk of incorrect acceptance

(ARIA) are inversely related; that is, a decrease in ARO is accompanied by an increase in ARIA.

a)            TRUE

b)            FALSE

 

6) The use of monetary-unit sampling is most appropriate when the auditor expects to find many

errors and when a monetary result is desired.

a)            TRUE

b)            FALSE

 

7) Acceptable risk of incorrect acceptance is the risk that the auditor is willing to take of accepting a

balance as correct when the true misstatement in the balance is greater than the estimated

misstatement in the population.

a)            TRUE

b)            FALSE

 

8) Monetary unit sampling selects individual dollars as the sampling unit but in practice auditors do

not audit individual dollars.

a)            TRUE

b)            FALSE

 

9) Acceptable risk of assessing control risk too low is the risk that the auditor is willing to take of

accepting a control as effective when the true population deviation rate is greater than the

estimated population deviation rate.

a)            TRUE

b)            FALSE

 

10) Estimated misstatement in the population and sample size are inversely related; that is, as

estimated misstatement increases, sample size decreases.

a)            TRUE

b)            FALSE

 

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