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“Non-sampling risk” is:
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:
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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Stratification is defined as:
In the concept of stratification, populations are divided into subsets. A probability sample is drawn from each group.
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For which of the following audit tests would an auditor most likely use attribute sampling?
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:
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.
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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