Awlit Sampling 383 The book value in the population is $198,000. What is the estimated audited value of the population using the mean-per-unit method? (1) $198,000. (2) $200,000. (3) $201,000. (4) $203,000. LO 9-8 1. Using the same facts as in (k) above, what is the estimated total audited value of the popu- lation using the difference method? (1) $198,000. (2) $200,000. (3) $201,000. (4) $203,000.382 Chapter Nine (3) Selection of the sample. (4) Audit quality controls, LO 9-3 . Which of the following statistical sampling techniques auditors? (1) Random number table selection. (2) Block selection. (3) Systematic selection. (4) Random number generator selection. LO 9-2 d. The auditors' primary objective in selec is to obtain: (1) A random sample. (2) A stratified sample. (3) A representative sample. 4) A large sample. LO 9-6 e. Discovery sampling is particularly (1) There are a large number of erro; (2) The auditors are looldg for number. % (3) The auditors know wh (4) The population is la LO 95 f. The auditors are using they did in the prior y: Objective L0 9-1 9-37. Multiple Choice Questions Questions Select the best answer for each of the following questions. Explain the reasons for your selection. a. Which of the following is an element of sampling risk? (1) Choosing an audit procedure that is inconsistent with the audit objective. (2) Concluding that no material misstatement exists in a materially misstated population based on taking a sample that includes no misstatement. (3) Failing to detect an error on a document that has been inspected by an auditor. (4) Failing to perform audit procedures that are required by the sampling plan. LO 9-6, 7 b. In assessing sampling risk, the risk of incorrect rejection and the risk of assessing control risk too high relate to the: (1) Efficiency of the audit. (2) Effectiveness of the audit.LO 9-1, 3, 4, 6, 7, 9 9 40. For each term in the first column below, identify its definition (or partial definition). Each definition may be used once or not at all. Term Definition (or Partial Definition) a. Allowance for sampling risk 1. A classical variables sampling plan enabling the auditors to estimate the b. Deviation rate average dollar value (or other variable) of items in a population by determining c. Discovery sampling the average value of items in a sample. d. Projected misstatement 2. A defined rate of departure from prescribed controls. Also referred to as e. Reliability occurrence rate or exception rate. f. Risk of assessing control risk too low 3. A sampling plan enabling the auditors to estimate the rate of deviation g. Risk of incorrect acceptance (occurrence) in a population. h. Sampling risk 4. A sampling plan for locating at least 1 deviation, providing that the deviation i. Tolerable deviation rate occurs in the population with a specified frequency. 5. A sampling plan in which the sample is selected in stages, with the need for each subsequent stage being conditional on the results of the previous stage. 6. Also referred to as precision, a measure of the difference between a sample estimate (projection) and the tolerable rate of deviation or tolerable misstatement at a specified sampling risk. 7. An estimate of the most likely amount of monetary misstatement in a population. 8. The complement of the risk of incorrect acceptance. 9. The maximum population rate of deviations from a prescribed control that the auditors will accept without modifying the planned assessment of control risk. 10. The possibility that the assessed level of control risk based on the sample is less than the true operating effectiveness of the controls. 11. The possibility that the assessed level of control risk based on the sample is greater than the true operating effectiveness of the control. 12. The risk that sample results will indicate that a population is materially misstated when, in fact, it is not. 13. The risk that sample results will indicate that a population is not materially misstated when, in fact, it is materially misstated. 14. The risk that the auditors' conclusion based on a sample might be different from the conclusion they would reach if the test were applied to the entire population