1) Using PPS if the projected misstatement is $10K, basic precision if $15K, Incremental allowance is $5K, expected misstatement is $4K, and if tolerable misstatement is $32K the sample fails.

True

False

2) Per the facts below PPS sampling would say there are 10,000 items in the population to select from.

Number of Account Receivable Customer Accounts: 10,000

Number of Invoices open at year end 50,000

Recorded amount of accounts receivable $50M

Tolerable Misstatement $5M

True

False

3)

Ratio method is considered superior to Difference estimation when evaluating the results of a Non-Stat Sample per the auditing literature.

True

False

4) under both Non-Statistical and PPS sampling can be designed to allow an auditor to end up with a stratified the sample.

True

False

5) The reliability of audit evidence is decreased when it is obtained from independent sources outside the entity.

True

False

6) In a Non-Stat sample if the projected misstatement is $8,000, expected statement is $7,900, and tolerable misstatement is $8,100 the sample fails and the account is probably misstated.

True

False

7) According to auditing standards the use of non-statistical sample allows the auditor to use auditor judgement when selecting the sample and can be as reliable as a PPS sampling.

True

False