Statistical Sampling by Konrath

Statistical Sampling for Testing Control Procedures
MULTIPLE CHOICE
1. Auditors who prefer statistical sampling to non-statistical sampling may do so

because statistical sampling helps the auditor
a. Measure the sufficiency of the evidential matter obtained.
b. Eliminate subjectivity in the evaluation of sampling results.
c. Reduce the level of tolerable error to a relatively low amount.
d. Minimize the failure to detect a material misstatement due to non-
sampling risk.
ANSWER: B
2. If all other factors in a sampling plan are held constant, changing the measure of
tolerable error to a smaller value would cause the sample size to be:
a. Smaller. b. Larger.
c. Unchanged. d. Indeterminate.
ANSWER: B
3. Which of the following sampling plans would be designed to estimate a numerical

measurement of a population, such as a dollar value?
a. Numerical sampling. b. Discovery sampling.
c. Sampling for attributes. d. Sampling for
variables.
ANSWER: D
4. Based on a random sample, it is estimated that four percent, plus or minus two
percent, of a firm's invoices contain errors. The plus or minus two percent is known as
the estimate's:
a. Precision. b. Accuracy.
c. Confidence level. d. Standard error.
ANSWER: A
5. In order to quantify the risk that sample evidence leads to erroneous conclusions
about the sampled population
a. Each item in the sampled population must have an equal chance of
being selected. b. Each item in the sampled population must
have a chance of being selected proportional to its book value. c. Each
item in the sampled population must have an equal or known probability of being
selected. d. The precise number of items in the population must be known.
ANSWER: C
142
Chapter 9 Statistical Sampling for Testing Control Procedures 143
6. Which of the following statements is not true regarding audit risk assessment?
a. The auditor studies the business and industry and applies analytical procedures as
a basis for assessing inherent risk.
b. When control risk and inherent risk are high, the auditor increases detection risk
to maintain overall audit risk at the desired level.
c. The auditor studies and evaluates internal control policies and procedures for
assessing control risk.
d. The auditor designs substantive audit procedures to reduce detection risk to an
acceptable level.
ANSWER: B
7. Which of the following factors does an auditor generally need to consider in

planning a particular audit sample for a control test?
a. Number of items in the population. b. Total dollar amount
of the items to be sampled. c. Estimated standard deviation of the population.
d. Tolerable error.
ANSWER: D
8. Random numbers can be used to select a sample only when each item in the
population:
a. Can be assigned to a specific stratum. b. Is independent of
outside influence. c. Can be identified with a unique number.
d. Is expected to be within plus or minus three standard deviations of
the population mean.
ANSWER: C
9. The tolerable occurrence rate for a control test is generally

a. Lower than the expected occurrence rate in the related accounting
records. b. Higher than the expected occurrence rate in the
related accounting records. c. Identical to the
expected occurrence rate in the related accounting records.
d. Unrelated to the expected occurrence rate in the related
accounting records.
ANSWER: B
10. An advantage of statistical over non-statistical sampling is that statistical sampling:

a. Enables auditors to objectively measure the reliability of their
sample results. b. Permits use of a smaller sample size than would be
necessary with non-statistical sampling. c. Is compatible with a
wider variety of sample selection methods than is non-statistical sampling.
d. Allows auditors to inject their subjective judgment in determining
144 Chapter 9 Statistical Sampling for Testing Control
Procedures
sample size and selection process in order to audit items of greatest value and highest
risk.
ANSWER: A
11. An auditor samples cash disbursement records for significant errors of $5 or more.
Upon finding one such error, these records are scheduled for a complete review. This
conclusion is most likely based on a
a. Cluster sample. b. Discovery sample.
c. Systematic sample. d. Stratified sample.
ANSWER: B
12. Of the following statements, which one best differentiates statistical sampling from
nonstatistical sampling?
a. Statistical sampling is a mathematical approach to inference, whereas
nonstatistical sampling is a more subjective approach.
b. Nonstatistical sampling has greater applicability to large populations than does
statistical sampling.
c. Nonstatistical sampling is more subjective, but produces greater consistency in
the application of audit judgment.
d. Nonstatistical sampling has greater applicability to populations that lend
themselves to random selection.
ANSWER: A
13. In examining cash disbursements, an auditor plans to choose a sample using systematic
selection with a random start. The primary advantage of such a systematic selection is
that population items
a. Which include errors will not be overlooked when the auditor
exercises compatible reciprocal options.
b. May occur in a systematic pattern, thus making the sample more
representative. c. May occur more than once in a sample.
d. Do not have to be prenumbered in order for the auditor to use
the technique.
ANSWER: D
14. When planning an attribute sampling application, the difference

between the expected occurrence rate and the tolerable occurrence rate is the
planned
a. Precision. b. Reliability.
c. Dispersion. d. Skewness.
ANSWER: A
15. If certain forms are not consecutively numbered

a. Selection of a random sample probably is not possible. b. Systematic
sampling may be appropriate. c. Stratified sampling should be used.
d. Random number tables cannot be used.
ANSWER: B
16. In an attribute sampling application, holding other factors constant, sample size
will increase as which of the following becomes smaller?
a. Reliability level. b. Population.
c. Planned precision. d. Expected rate of occurrence.
ANSWER: C
17. Which of the following sampling methods is most useful to auditors when testing
for internal control effectiveness?
a. Stratified random sampling. b. Attribute sampling.
c. Variables sampling. d. Unrestricted random
sampling with replacement.
ANSWER: B
18. Attribute sampling, as applied to control testing, can assist the auditor in several ways.
Which of the following tasks is not enhanced by sampling?
a. Determining the number of documents to examine in testing for a specific
attribute.
b. Selecting the documents to be tested.
c. Examining the documents.
d. Evaluating the sample results.
ANSWER: C
19. Which of the following is an element of sampling risk?

a. Choosing an audit procedure that is inconsistent with the audit
objective. b. Choosing a sample size that is too small to achieve
the sampling objective. c. Failing to detect an error on a
document that has been inspected by the auditor. d. Failing
to perform audit procedures that are required by the sampling plan.
ANSWER: B
20. Which of the following would not be an attribute of interest to an auditor performing
control tests?
a. Do selling prices agree with published price lists?
b. Do purchased parts meet established quality standards?
c. Are proper labor rates being used to compute payroll?
Procedures
d. Are account distributions (debits and credits) correct?
ANSWER: B
21. The precision limit for control testing necessary to justify lowering the
assessed control risk level depends primarily on which of the following?
a. The cause of the errors. b. The materiality of the
attribute(s) to be tested. c. The amount of any substantive errors. d.
The limit used in audits of similar clients.
ANSWER: B
22. Which of the following statements concerning sample size is true?

a. An increase in the tolerable occurrence rate, other factors remaining unchanged,
increases sample size.
b. The higher the expected occurrence rate, other factors remaining unchanged, the
larger will be the sample size.
c. The more critical the attribute being tested, the higher will be the tolerable
occurrence rate set by the auditor, and the larger will be the sample size.
d. The lower the acceptable risk of underassessment of control risk, the smaller will
be the sample size.
ANSWER: B
23. In the examination of the financial statements of Delta Company, the auditor
determines that in performing a test of internal control effectiveness, the rate of error in the
sample does not support the auditor's preconceived notion of a tolerable
occurrence rate when, in fact, the actual error rate in the population does meet the auditor's
notion of effectiveness. This situation illustrates the risk of
a. Underassessment of control risk. b. Overassessment of
control risk. c. Incorrect rejection. d.
Incorrect acceptance.
ANSWER: B
24. If all other factors in a sampling plan are held constant, changing the risk of
underassessment from five percent to
three percent would cause the sample size to be:
a. Smaller. b. Larger.
c. Unchanged. d. Indeterminate.
ANSWER: B
25. An auditor performs a test to determine whether all merchandise for

which the client was billed was received. The population for this test consists of all
a. Merchandise received. b. Vendors' invoices.

c. Canceled checks. d. Receiving reports.
ANSWER: B
26. Although mathematically based, statistical sampling does not replace audit judgment. In
utilizing statistical sampling techniques, the auditor must apply judgment in all but which
of the following tasks?
a. Selecting a tolerable rate of error.
b. Determining an acceptable risk of underassessing
control risk.
c. Calculating the actual error rate.
d. Assessing the materiality of control weaknesses.
ANSWER: C
27. To determine sample size in an attribute sampling application, what

must be specified?
a. Population mean, expected error rate, precision. b. Precision,
reliability, standard deviation. c. Precision, reliability, expected occurrence
rate. d. Population mean, standard deviation, precision.
ANSWER: C
28. Which of the following statements regarding statistical sampling in auditing is true?
a. Inasmuch as audits are test-based, generally accepted auditing standards require
the use of statistical
sampling methods whenever the auditor decides to
examine only part of a population.
b. Although statistical sampling may be applied to control testing, it is required for
substantive testing
purposes.
c. Sampling methods are used by auditors in both control testing and substantive
testing.
d. Statistical sampling methods are more appropriate for control testing when the
auditor elects to reprocess transactions, than when controls are tested by means of
document examination.
ANSWER: C
29. The application of statistical sampling techniques is least related to which of

the following generally accepted auditing standards?
a. The work is to be adequately planned and assistants, if any, are to be
properly supervised. b. In all matters relating to the assignment, an
independ- ence in mental attitude is to be maintained by the auditor
or auditors. c. A sufficient understanding of the internal control
Procedures
system is to be obtained to plan the audit and to determine the

nature, timing, and extent of tests to be performed.
d. Sufficient competent evidential matter is to be obtained
through inspection, observation, inquiries, and confirmations to afford a
reasonable basis for an opinion regarding the financial statements under
examination.
ANSWER: B
30. The major weakness of nonstatistical (judgmental) sampling is it

a. Usually requires larger sample sizes than statistical sampling.
b. Does not allow sampling risk to be objectively measured.
c. Frequently results in samples that are not
representative of the population. d. Gives less accurate point
estimates of parameters than statistical sampling.
ANSWER: B
31. An auditor is testing credit authorization procedures by examining sales

invoices for credit approval by the credit department. The procedures will be considered to
be working adequately if 96% of all sales invoices either indicate approval or
are cash sales. The auditor selects a random sample of 100 invoices. In this
situation, which of the following outcomes illustrates underassessment?
a. The auditor finds five deviations and concludes that procedures
work inadequately. The actual population deviation rate is 2%.
b. The auditor finds no deviations and concludes that procedures
work adequately. The true population deviation rate is 5%.
c. The auditor finds no deviations and concludes that the procedures
work adequately. The true population deviation rate is 2%.
d. The auditor finds five deviations and concludes that procedures
work inadequately. The true population deviation rate is 6%.
ANSWER: B
32. If an auditor, planning to use statistical sampling, is concerned with the

number of a client's sales invoices that contain mathematical errors, the auditor would most
likely utilize
a. Random sampling with replacement. b. Sampling for attributes.
c. Sampling for variables. d. Stratified random sampling.
ANSWER: B
33. An advantage of using statistical over non-statistical sampling

methods in tests of controls is that the statistical methods
a. Afford greater assurance than a non-statistical sample of equal size.
b. Provide an objective basis for quantitatively evaluating
sample risks. c. Can more easily convert the sample into a dual-
purpose test useful for substantive testing. d. Eliminate the
need to use judgment in determining appropriate sample sizes.
ANSWER: B
34. Several risks are inherent in the evaluation of audit evidence which
has been obtained through the use of statistical sampling. Which of the following
risks is an example of the risk of underassessment of control risk?
a. Failure to properly define the population to be
sampled.
b. Failure to draw a random sample from the population. c. Failure to
accept the statistical hypothesis that
internal control is unreliable when, in fact, it is. d. Failure to accept the
statistical hypothesis that a book value is not materially misstated when the true
book value is not materially misstated.
ANSWER: C
35. As a result of tests of controls, an auditor underassessed control risk and decreased
substantive testing. This underassessment occurred because the true occurrence rate in
the population was
a. Less than the risk of underassessment in the auditor's sample.
b. Less than the occurrence rate in the auditor's sample. c. More than the
risk of underassessment in the auditor's sample.
d. More than the occurrence rate in the auditor's sample.
ANSWER: D
36. If all other factors specified in an attribute sampling plan remain constant, changing
the specified precision from 6% to 10%, and changing the specified reliability from
97% to 93% would cause the required sample size to
a. Increase. b. Remain the same.
c. Decrease. d. Change by 4%.
ANSWER: C
37. Which of the following factors is generally not considered in determining the
sample size for a test of controls?
a. Population size. b. Tolerable rate.
c. Risk of underassessment. d. Expected population
occurrence rate.
ANSWER: A
Procedures
38. The expected population occurrence rate of client billing errors is 3%. The
auditor has established a tolerable rate of 5%. In the review of client invoices the auditor
should use
a. Stratified sampling. b. Variable sampling.
c. Discovery sampling. d. Attribute sampling.
ANSWER: D
39. An auditor desired to test credit approval on 10,000 sales invoices processed during the
year. The auditor designed a statistical sample that would provide a 1% risk of assessing
control risk too low (99% confidence) that not more than 7% of the sales invoices
lacked approval. The auditor estimated from previous experience that about 2 1/2% of the
sales invoices lacked approval. A sample of 200 invoices was examined and
7 of them were lacking approval. The auditor then determined the upper
occurrence limit to be 8%. In the evaluation of this sample, the auditor decided to increase
the level of the preliminary assessment of control risk because the
a. Tolerable rate (7%) was less than the achieved upper occurrence limit
(8%). b. Expected occurrence rate (7%) was more than the
percentage of errors in the sample (3 1/2%). c. Achieved upper
occurrence limit (8%) was more than the percentage of errors in the sample (3 1/2%).
d. Expected occurrence rate (2 1/2%) was less than the tolerable rate
(7%).
ANSWER: A
40. To evaluate the sample results for an attributes sampling application, a measure
of precision is required. Which of the following statements is true regarding
precision?
a. Precision is subtracted from the tolerable rate of error to determine the
acceptability of sample results. b. Precision is added to the tolerable rate of error to
determine the acceptability of sample results. c. Precision is subtracted
from the sample occurrence rate and the result is compared to the tolerable rate of
error. d. Precision is added to the sample
occurrence rate and the result is compared to the tolerable rate of error.
ANSWER: D
41. An auditor who uses statistical sampling for attributes in testing internal controls
should increase the assessed level of control risk when the
a. Sample occurrence rate is less than the expected
occurrence rate used in planning the sample. b. Tolerable rate less the
allowance for sampling risk exceeds the sample occurrence rate.
c. Sample occurrence rate plus the allowance for sampling risk exceeds
the tolerable rate. d. Sample occurrence rate plus the allowance for
sampling risk equals the tolerable rate.
ANSWER: C
42. Which of the following statements is correct concerning statistical sampling

for control testing?
a. The population size has little or no effect on determining sample
size except for very small populations. b.
The expected population occurrence rate has little or no effect on
determining sample size except for very small populations.
c. As the population size doubles, the sample size also should double.
d. For a given tolerable rate, a larger sample size should be selected as
the expected population deviation rate decreases.
ANSWER: A
43. An auditor wishes to determine if the error rate on travel reimbursement claims is
within the five-percent tolerance level set by management. What sampling plan should
the auditor use?
a. Variables sampling. b. Attribute sampling.
c. Judgment sampling. d. PPS sampling.
ANSWER: B
44. The auditor samples cash disbursements for minor errors of $5 or less.
The parameter to be estimated is the error rate, which might be as high as 10%. The
auditor is most likely to use
a. Block sampling. b. Variables sampling.
c. Attributes sampling. d. Discovery sampling.
ANSWER: C
45. An important difference between a statistical sample and a non-statistical

(judgmental) sample is that with a statistical sample:
a. No judgment is required, everything is by formula. b. A smaller
sample size can be used. c. More accurate results are obtained.
d. Population estimates with measurable reliability can be made.
ANSWER: D
COMPLETION:
47. Statistical sampling for attributes is most applicable in situations where a visible
in the form of exists.
ANSWER: AUDIT TRAIL, DOCUMENTATION

Procedures
48. As contrasted with statistical sampling, nonstatistical sampling is a more approach

to inference.
ANSWER: SUBJECTIVE
49. estimates the frequency of events, whereas is an estimate

of amount.
ANSWER: ATTRIBUTE SAMPLING, VARIABLES SAMPLING
50. The is the anticipated error rate, whereas the

is the maximum rate of error acceptable to the auditor, while still warranting a lowering
of assessed control risk below the maximum level.
ANSWER: EXPECTED OCCURRENCE RATE, TOLERABLE OCCURRENCE

RATE
51. The the precision range, the larger the sample size.
ANSWER: NARROWER
52. The more critical an attribute to those control policies and procedures relevant to an
audit, the the tolerable occurrence rate.
ANSWER: LOWER
53. Another term for "risk of underassessment" is ____________

` risk.
ANSWER: BETA
54. Random selection requires that items to be included in the sample must be drawn on a
basis.
ANSWER: PROBABILITY
55. When documents are not prenumbered, an acceptable alternative to the use of random
number tables or computer-generated numbers is .
ANSWER: SYSTEMATIC SAMPLING
56. Under conditions of detection risk, a minimal quantity of audit evidence is needed.
ANSWER: HIGH
MATCHING:
57. Indicate by letter the term matching the definition given.
A. Attribute sampling
B. Alpha risk
C. Discovery sampling
D. Beta risk
E. Expected occurrence rate
F. Precision
G. Discovery sampling
H. Sampling risk
I. Systematic sampling
J. Tolerable occurrence rate
K. Upper occurrence limit
L. Variables sampling
____1. An estimate of frequency of events.
____2. An orderly approach to locating a particular event.
____3. The anticipated error rate.
____4. Risk of underassessment.
____5. Maximum rate of error acceptable to the auditor.
____6. Risk that the auditor’s conclusions about a population

will be incorrect.
____7. A random selection method that involves choosing every

nth item in the population until the requisite sample
size has been reached.
____8. The calculated maximum error rate based on the results of

sampling.
____9. Risk of overassessment.
____10. Range within the true answer most likely falls.
SOLUTION:
1. A
2. C
3. E
4. D
Procedures
5. J
6. H
7. I
8. K
9. B
10. F
PROBLEM/ESSAY:
58. Margaret Hopkins, CPA, wishes to test the effectiveness of internal controls over
the customer billing function of
Jack’s Wholesale Hardware, an audit client. Hopkins has
identified the following attributes to be tested. For each
attribute, indicate the appropriate sampling unit and
carefully define what constitutes an error.
1. Does the customer order agree with the invoice as to

type and quantity of goods?
2. Does the shipping order agree with the invoice as to
type and quantity of goods?
3. Has customer credit been approved?
4. Does the invoice amount cause the customer to exceed
the prepared credit limit?
5. Have goods been billed but not shipped?
6. Have goods been shipped but not billed?
7. Do invoiced prices agree with official price lists?
8. Do credit and discount terms appearing on face of customer
invoice accord with company policy?
9. Are proper accounts debited and credited?
SOLUTION:
1. SAMPLING UNIT: Sales invoice

ERROR: Lack of agreement between invoice and order
as to:
Type of goods
Quantity of goods
Price of goods
Credit and discount terms

ERROR: Lack of agreement between invoice and
shipping order as to:
Type of goods
Quantity of goods

ERROR: Lack of evidence of credit approval on face
of invoice

ERROR: Invoice amount plus previous customer
balance exceeds prepared credit limit

ERROR: Shipping order and/or bill of lading not
attached to customer invoice
6. SAMPLING UNIT: Bill of lading

ERROR: Matching invoice not located

ERROR: Price not in agreement with master price list
and no evidence of proper approval of
billed price

ERROR: Credit and/or discount terms at variance with
company policy, and no evidence of proper
approval of quoted credit and discount terms.

ERROR: Incorrect debits or credits appearing on face
of invoice and not corrected before posting
accounts.
59. Sampling can assist the auditor in various ways during the examination of
documentary evidence for tests of internal
controls. Using a vouchering and vendor billing application
as an example, assume that you are interested in evaluating
internal controls relative to ordering goods, receiving
goods, and processing vendor invoices. Discuss how attribute
sampling might assist you in the following phases
of your tests of controls:
a. Determining the number of vouchers to test;
b. Selecting the vouchers for testing;
c. Evaluating the results of the voucher test;
d. Assessing audit risk associated with the
expenditure cycle.
SOLUTION:
Procedures
a. In determining the number of vouchers to test, the auditor will need to set a tolerable
occurrence rate and an acceptable risk of underassessment. These parameters, along with
an estimated occurrence rate may then be used as inputs to determining sample size.
b. If vouchers are prenumbered, the auditor can elect to use a random selection
approach to selecting vouchers test
for predefined attributes.
c. Having examined the sample for the attributes of interest, the auditor can
calculate the observed error
rate and the upper occurrence limit.
d. The upper occurrence limit can be compared with the tolerable occurrence rate to
support raising or lowering the assessed level of control risk.
60. George Jones, CPA, wishes to test payroll controls for

Hopkins Manufacturing, an audit client. He has identified
the following attributes of interest for testing purposes:
1. Correctness of pay rates and hours used in
preparing the payroll summary;
2. Genuineness of listed employees;
3. Correctness of gross pay, withholdings, and net
pay;
4. Correctness of debits and credits.
A pilot test of forty payroll transactions revealed the following errors: One
transaction revealed an incorrect
pay rate; two transactions resulted in incorrect
calculations of either gross pay or withholdings; and two
transactions resulted in erroneous debits or credits. All
listed employees were found to be working for the company
during the pay period being tested. Jones believes that
four or more errors for each of the four attributes is
significant.
Required:
a. Based on the pilot sample, calculate the expected
occurrence rate and the tolerable occurrence rate for
each attribute.
b. In determining sample size, Jones can select an
expected occurrence rate ranging from the low for
attribute number 2 to the high for attributes 3 and 4.
What impact will a low rate relative to a high rate
have on the calculated sample size?
c. What other factors must Jones consider before
determining the sample size?
c. Assuming that a sample of 100 payroll summary entries
produced the following calculated upper occurrence
limits, what impact will these limits have on
Jones substantive audit program?
Attribute 1: 7.0%
Attribute 2: 4.0%
Attribute 3: 12.0%
Attribute 4: 6.0%
SOLUTION:
a. The tolerable occurrence rate is 10% (4/40) for each

of the attributes. The expected occurrence rates are:
Attribute No. 1: 2.5%
b. The higher the expected occurrence rate, the larger
will be the sample size.
c. Jones must determine the acceptable risk of
underassessing control risk.
d. Only attribute 3 produces an unacceptable upper
occurrence limit, exceeding the tolerable rate of 10%.
Given incorrect calculation of gross pay, withholdings,
and net pay, Jones should plan to focus more heavily
on inventory costing, inasmuch as inventory includes
both direct and indirect labor components. He should
also concentrate on payroll cost included in general
and administrative expense, as well as on accrued
payroll and payroll taxes payable at year end.
Incorrect calculation of gross pay and withholdings
will also impact the calculation of employer’s payroll
tax expense. Therefore, Jones must plan to audit these
accounts more intensively than under conditions of
strong internal control.

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Statistical Sampling for Testing Control Procedures

1. Auditors who prefer statistical sampling to non-statistical sampling may do so

3. Which of the following sampling plans would be designed to estimate a numerical

7. Which of the following factors does an auditor generally need to consider in

9. The tolerable occurrence rate for a control test is generally

10. An advantage of statistical over non-statistical sampling is that statistical sampling:

14. When planning an attribute sampling application, the difference

15. If certain forms are not consecutively numbered

19. Which of the following is an element of sampling risk?

d. Are account distributions (debits and credits) correct?

22. Which of the following statements concerning sample size is true?

25. An auditor performs a test to determine whether all merchandise for

a. Merchandise received. b. Vendors' invoices.

27. To determine sample size in an attribute sampling application, what

29. The application of statistical sampling techniques is least related to which of

system is to be obtained to plan the audit and to determine the

30. The major weakness of nonstatistical (judgmental) sampling is it

31. An auditor is testing credit authorization procedures by examining sales

32. If an auditor, planning to use statistical sampling, is concerned with the

33. An advantage of using statistical over non-statistical sampling

42. Which of the following statements is correct concerning statistical sampling

45. An important difference between a statistical sample and a non-statistical

ANSWER: AUDIT TRAIL, DOCUMENTATION

48. As contrasted with statistical sampling, nonstatistical sampling is a more approach

49. estimates the frequency of events, whereas is an estimate

ANSWER: ATTRIBUTE SAMPLING, VARIABLES SAMPLING

50. The is the anticipated error rate, whereas the

ANSWER: EXPECTED OCCURRENCE RATE, TOLERABLE OCCURRENCE

53. Another term for "risk of underassessment" is ____________

ANSWER: SYSTEMATIC SAMPLING

57. Indicate by letter the term matching the definition given.

____1. An estimate of frequency of events.

____2. An orderly approach to locating a particular event.

____3. The anticipated error rate.

____4. Risk of underassessment.

____5. Maximum rate of error acceptable to the auditor.

____6. Risk that the auditor’s conclusions about a population

____7. A random selection method that involves choosing every

____8. The calculated maximum error rate based on the results of

____9. Risk of overassessment.

____10. Range within the true answer most likely falls.

1. Does the customer order agree with the invoice as to

1. SAMPLING UNIT: Sales invoice

2. SAMPLING UNIT: Sales invoice

3. SAMPLING UNIT: Sales invoice

4. SAMPLING UNIT: Sales invoice

5. SAMPLING UNIT: Sales invoice

6. SAMPLING UNIT: Bill of lading

7. SAMPLING UNIT: Sales invoice

8. SAMPLING UNIT: Sales invoice

9. SAMPLING UNIT: Sales invoice

60. George Jones, CPA, wishes to test payroll controls for

a. The tolerable occurrence rate is 10% (4/40) for each

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