Audit Sampling - CPA Auditing and Attestation (AUD)
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Stratification is defined as:
Stratification is defined as:
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In the concept of stratification, populations are divided into subsets. A probability sample is drawn from each group.
In the concept of stratification, populations are divided into subsets. A probability sample is drawn from each group.
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Logical Checks include:
Logical Checks include:
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Logical checks include: validity checks, limit checks and check digits
Logical checks include: validity checks, limit checks and check digits
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Test Data
Test Data
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Test data will include erroneous data. The purpose of using erroneous data is to assess the system capability of validating data. It uses erroneous data to locate and identify the source of the error.
Test data will include erroneous data. The purpose of using erroneous data is to assess the system capability of validating data. It uses erroneous data to locate and identify the source of the error.
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As an audit test, John James CPA uploaded client data to its software and compared the results to the client output. This is an example of
As an audit test, John James CPA uploaded client data to its software and compared the results to the client output. This is an example of
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This is an example of a parallel simulation. The auditor compares the output received from its system with the output received from the client system.
This is an example of a parallel simulation. The auditor compares the output received from its system with the output received from the client system.
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Of the following computer-assisted auditing techniques allows fictitious and real transactions to be processed together without client operating personnel being aware of the testing process?
Of the following computer-assisted auditing techniques allows fictitious and real transactions to be processed together without client operating personnel being aware of the testing process?
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An integrated test facility uses test data commingled with actual data to test transactions.
An integrated test facility uses test data commingled with actual data to test transactions.
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Processing data through the use of simulated files provide an auditor with information about the operating effectiveness of controls. One of the techniques involved in this approach makes use of:
Processing data through the use of simulated files provide an auditor with information about the operating effectiveness of controls. One of the techniques involved in this approach makes use of:
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An integrated test facility runs test transactions through the live system and posts to simulated files to provide an auditor with information about the operating effectiveness of controls.
An integrated test facility runs test transactions through the live system and posts to simulated files to provide an auditor with information about the operating effectiveness of controls.
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When an engagement team confronts a difficulty in their audit due to a lack of understanding of a certain component of IT, the team should resort to which option?
When an engagement team confronts a difficulty in their audit due to a lack of understanding of a certain component of IT, the team should resort to which option?
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When there is an area of testing which the engagement team feels it would need additional expertise in, the correct option would be to work with a specialist in the field rather than make assumptions, give up, or blindly trust.
When there is an area of testing which the engagement team feels it would need additional expertise in, the correct option would be to work with a specialist in the field rather than make assumptions, give up, or blindly trust.
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Judgments about materiality are:
Judgments about materiality are:
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The definition of materiality is one that will influence the decision of the reader. Therefore, the size and nature of the decision will impact materiality
The definition of materiality is one that will influence the decision of the reader. Therefore, the size and nature of the decision will impact materiality
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In terms of materiality
In terms of materiality
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The auditor's judgment determines the materiality level that the auditor is willing to accept.
The auditor's judgment determines the materiality level that the auditor is willing to accept.
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In planning the audit, materiality provides a basis for:
In planning the audit, materiality provides a basis for:
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Materiality is the basis for determining the nature and extent of risk. This is examined during the planning stages. The sample size and testing are developed based on the level of materiality.
Materiality is the basis for determining the nature and extent of risk. This is examined during the planning stages. The sample size and testing are developed based on the level of materiality.
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If new info becomes available that could require a reevaluation of the quantitative level of materiality applied during an audit of an issuer, then the auditor should:
If new info becomes available that could require a reevaluation of the quantitative level of materiality applied during an audit of an issuer, then the auditor should:
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If new information becomes available that could require a reevaluation of the quantitative level of materiality applied during an audit of an issuer, then the auditor should raise or lower the materiality level as appropriate to the situation.
If new information becomes available that could require a reevaluation of the quantitative level of materiality applied during an audit of an issuer, then the auditor should raise or lower the materiality level as appropriate to the situation.
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Of the following, which best describes the concept of materiality?
Of the following, which best describes the concept of materiality?
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According to the US Supreme Court, information is material if there is a substantial likelihood that the information would be viewed by a reasonable investor as having significantly altered the total mix of available information.
According to the US Supreme Court, information is material if there is a substantial likelihood that the information would be viewed by a reasonable investor as having significantly altered the total mix of available information.
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Of the following, which benchmark would be utilized when considering the materiality of a single cash transaction?
Of the following, which benchmark would be utilized when considering the materiality of a single cash transaction?
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All of the answer choices are different thresholds, determined by experienced auditors. Analyzing a single transaction compared to a whole balance sheet account should use proper benchmarks.
All of the answer choices are different thresholds, determined by experienced auditors. Analyzing a single transaction compared to a whole balance sheet account should use proper benchmarks.
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“Non-sampling risk” is:
“Non-sampling risk” is:
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Non-sampling risk is unrelated to the sample itself. Typically, a non-sampling risk would involve the misapplication of audit procedures. This would be unrelated to the sample
Non-sampling risk is unrelated to the sample itself. Typically, a non-sampling risk would involve the misapplication of audit procedures. This would be unrelated to the sample
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In the case of sampling risk:
In the case of sampling risk:
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Both a and b are correct. This risk could be that controls are more effective than they actually are causing oversampling or less than they actually are causing under-sampling.
Both a and b are correct. This risk could be that controls are more effective than they actually are causing oversampling or less than they actually are causing under-sampling.
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For which of the following audit tests would an auditor most likely use attribute sampling?
For which of the following audit tests would an auditor most likely use attribute sampling?
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Attribute sampling is used to test controls. Inspecting employee time cards for proper approval by supervisors is a test of controls. Controls often relate to authorization, validity, completeness, accuracy, classification, and proper period.
Attribute sampling is used to test controls. Inspecting employee time cards for proper approval by supervisors is a test of controls. Controls often relate to authorization, validity, completeness, accuracy, classification, and proper period.
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While performing a test of details during an audit, an auditor determined that the sample results supported the conclusion that the recorded account balance was materially misstated. It was in fact not materially misstated. This situation illustrates the risk of:
While performing a test of details during an audit, an auditor determined that the sample results supported the conclusion that the recorded account balance was materially misstated. It was in fact not materially misstated. This situation illustrates the risk of:
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Erroneously concluding that an account balance is materially misstated is an example of incorrect rejection.
Erroneously concluding that an account balance is materially misstated is an example of incorrect rejection.
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When conducting testing of various data areas during an audit, the auditor should uniformly use the same sample selection procedures for each testing unit.
When conducting testing of various data areas during an audit, the auditor should uniformly use the same sample selection procedures for each testing unit.
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Each data set to be tested requires a customized well thought out sampling and testing approach that allows the auditor to examine testing areas properly.
Each data set to be tested requires a customized well thought out sampling and testing approach that allows the auditor to examine testing areas properly.
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Logical Checks include:
Logical Checks include:
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Logical checks include: validity checks, limit checks and check digits
Logical checks include: validity checks, limit checks and check digits
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Test Data
Test Data
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Test data will include erroneous data. The purpose of using erroneous data is to assess the system capability of validating data. It uses erroneous data to locate and identify the source of the error.
Test data will include erroneous data. The purpose of using erroneous data is to assess the system capability of validating data. It uses erroneous data to locate and identify the source of the error.
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