Question: Evaluate the following statement made by an auditor: On every aspect of the audit where it is possible, I calculate the point estimate of the

Evaluate the following statement made by an auditor: "On every aspect of the audit where it is possible, I calculate the point estimate of the misstatements and evaluate whether the amount is material. If it is, I investigate the cause and continue to test the population until I determine whether there is a serious problem. The use of statistical sampling in this manner is a valuable audit tool."

Step by Step Solution

★★★★★

3.27 Rating (159 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The statement illustrates how the misuse of statistical est... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

185-B-A-A-A (112).docx

120 KBs Word File

Students Have Also Explored These Related Auditing Questions!

Problem 5 (20 points) Consider the following Cournot duopoly model. Firms 1 and 2 produce the same good. They simultaneously choose their output levels y, y2, and the resulting price is given by the...

Evaluate the following statement made by an auditor: "I took a random sample and derived a 90 percent confidence interval of $800,000 to $900,000. That means that the true population value will be...

Evaluate the following statement made by a third-year auditor:"In comparison with other accounts, such as accounts receivable or property, plant, and equipment, it is my assessment that cash and...

statement bounds expressed in monetary use the statistical inference process QUESTIONS 17-1 (OBJECTIVE 17-1) What major difference between (a) tests of controls and substantive tests of transactions...

1. Error includes a. Engaging in complex transactions that are structured to misrepresent the financial position or financial performance of the entity b. Concealing or not disclosing facts that...

REVIEW QUESTIONS 13-1 (ORJECTIvE Ia-) What is the purpose of risk assessment procedures and how do differ from the four other types of audit tests? evi- 13-2 OJECTIVE 13-n Can a system additional...

Chapter 10 Business Process and Information Systems Development \"Jeff, we clean the clubhouse restrooms twice a day . . . in the morning before 7 and again just before lunch. We've been doing that...

I need the solution forexsercise 33 - 38 on chapter 9of corporate financeas the attached file. pls do and send to my e..8@gmail.com Chapter 9 Stock Valuation 299 9. Corporate Ethics Is it unfair or...

"PCAOB Inspection Reports for KPMG" is an excellent topic. Summarize 3 reports - 2010, 2012 & 2014.At least 6 references are needed - 3 academic & 3 practitioner (short articles).Please follow the...

Need help with these multiple choice questions for internal audit final exam. Due in 2 hours. QUESTION 1 RsQ_004Without management direction and assumption of responsibility, it would be...

3. You know that there is a wave of retirements that will take place in 15 years' time, and that the pension fund will have to pay out $81'400 a month in perpetuity to the beneficiaries as of that...

Cremation rates have been increasing in the United States. Mississippi is the state with the lowest rate, which is 10%. Suppose that we take a random sample of 900 deaths in Mississippi and that the...

the glass - steagall act of 1 9 3 3 prevented any firm that accepts deposits and is a member of the Fed from holding any corporate bonds in its asset portfolio none of the above state - chartered...

31. The Omega Data Processing Company performs three types of activities: payrolls, account receivables, and inventories. The profit and time requirements for keypunch, computation and office...

What sources are used by the auditor to gather information to assess fraud risks?

What should the audit team consider in its planning discussion about fraud risks?

Auditors are required to make inquiries of individuals in the company when gathering information to assess fraud risk. Identify those with whom the auditor must make inquiries.

Is net income for March expected to increase with the proposed strategy changes? Complete this question by entering your answers in the tabs below. Prepare budgeted income statements for each of the...

A General Power bond with a face value of $1,000 carries a coupon rate of 8.9%, has 9 years until maturity, and sells at a yield to maturity of 7.9%. (Assume annual interest payments.) a. What...

You own a stock portfolio invested 27 percent in Stock Q, 17 percent in Stock R, 43 percent in Stock S, and 13 percent in Stock T. The betas for these four stocks are 0.96, 1.02, 1.42, and 1.87,...