By preparing a four$-$column bank reconciliation $("$proof of cash"$)$ for the last month of the year, an auditor will generally be able to detect:

Multiple Choice

An unrecorded check written at the beginning of the month which was cashed during the period covered by the reconciliation.

A cash sale which was not recorded on the books and was stolen by a bookkeeper.

An embezzlement of unrecorded cash receipts on receivables before they had been deposited into the bank.

A credit sale which has been recorded twice in the sales journal.

The auditors expect a population deviation rate of billing errors of zero percent, and have established a tolerable rate of six percent. The sampling approach most likely to be used is:

Multiple Choice

Attributes sampling.

Discovery sampling.

Variables sampling.

None, as sampling does not seem appropriate in this situation.

An advantage of using statistical sampling techniques is that such techniques:

Multiple Choice

Mathematically measure risk.

Eliminate the need for judgmental decisions.

Define the values of the allowance for sampling risk and tolerable misstatement required to provide audit satisfaction.

Have been established in the courts to be superior to judgmental sampling.

What effect does decreasing the risk of incorrect acceptance have on sample size?

Multiple Choice

Increases.

Decreases.

No effect.

Indeterminate.