A sample of all items of a population will eliminate sampling risk, but increase nonsampling risk

Multiple-Choice Questions 

1. 

easy 

A sample in which the characteristics of the sample are the same as those of the population is 

a(n): 

a. 

variables sample. 

b. 

representative sample. 

c. 

attributes sample. 

d. 

random sample. 

2. 

easy 

When the auditor decides to select less than 100 percent of the population for testing, the auditor 

is said to use: 

a. 

audit sampling. 

b. 

representative sampling. 

c. 

poor judgment. 

d. 

none of the above. 

3. 

In practice, auditors _________ know if a sample is truly a representative one. 

easy 

a. 

sometimes 

b. 

often 

c. 

routinely 

d. 

never 

4. 

To determine if a sample is truly representative, an auditor must: 

easy 

a. 

conduct multiple samples of the same population. 

b. 

never use sampling because of the expense involved. 

c. 

audit the entire population. 

d. 

perform none of the above. 

5. 

One of the ways to eliminate nonsampling risk is through: 

easy 

a. 

proper supervision and instruction of the client’s employees.

b. 

proper supervision and instruction of the audit team. 

c. 

the use of attributes sampling rather than variables sampling. 

d. 

controls which ensure that the sample drawn is random and representative. 

6. 

One cause of nonsampling risk is: 

easy 

a. 

ineffective use of audit procedures. 

b. 

testing less than the entire population. 

c. 

use of extensive tests of controls. 

d. 

any of the above. 

7. 

An auditor can increase the likelihood that a sample is representative by using care in: 

easy 

a. 

designing the sampling process. 

b. 

designing the sample selection. 

c. 

evaluating the sample results. 

d. 

performing all of the above. 

Auditing and Assurance Services, 14e, Global Edition (Arens)

Chapter 15 Audit Sampling for Tests of Controls and Substantive Tests of

Transactions

Learning Objective 15-1

1) A sample in which the characteristics of the sample are the same as those of the population is a(n):

A) variables sample.

B) representative sample.

C) attributes sample.

D) random sample.

Answer: B

Terms: Sample in which characteristics of sample are same as population

Diff: Easy

Objective: LO 15-1

AACSB: Reflective thinking skills

2) When the auditor decides to select less than 100 percent of the population for testing, the auditor is said

to use:

A) audit sampling.

B) representative sampling.

C) poor judgment.

D) estimation sampling.

Answer: A

Terms: Auditor selects less than 100 percent of population for testng

Diff: Easy

Objective: LO 15-1

AACSB: Reflective thinking skills

3) To determine if a sample is truly representative of the population, an auditor would be required to:

A) conduct multiple samples of the same population.

B) never use sampling because of the expense involved.

C) audit the entire population.

D) use systematic sample selection.

Answer: C

Terms: Sample truly representative of population

Diff: Easy

Objective: LO 15-1

AACSB: Reflective thinking skills

1

Copyright © 2012 Pearson Education

How does Nonsampling risk differ from sampling risk?

Sampling risk is when auditors make a decision based on the sample results. To control the sampling risk, the auditors use a larger sample size. Nonsampling risk is based on the factors not on the sampling.

What is Nonsampling risk?

Nonsampling risk includes the possibility of selecting audit procedures that are not appropriate to achieve the specific objective. For example, confirming recorded receivables cannot be relied on to reveal unrecorded receivables.

Can sampling risk be eliminated?

Yes, sampling risk can be eliminated by testing the 100% of the population. It is because if the sample size were increased to include all the items in a population, there would be no sampling and therefore no sampling risk.

How does sampling risk affect sample size?

In determining the sample size, the auditor should consider whether sampling risk is reduced to an acceptably low level. Sample size is affected by the level of sampling risk that the auditor is willing to accept. The lower the acceptable risk, the greater the sample size will need to be.

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