True or False questions

34) 34) In selecting the sample, probabilistic methods must be used for both statistical and nonstatistical sampling. ) 35) 35) An auditor might conclude that the computed upper exception rate (CUER) for missing shipping documents is 4 percent at a 5 percent sampling risk, meaning the auditor concludes that the exception rate in the population is no greater than 5 percent with a 4 percent risk of the exception rate exceeding 5 percent. 36) 36) For most audits, revenue recognition is considered to be a significant risk. 37) As a test of the occurrence transaction-related audit objective for sales and the accuracy balance-related audit objective for accounts receivable, auditors can use audit data analytics to match, for example, cash receipts to invoiced sales amounts. 37) 38) The confirmations must be mailed by the auditor, but should contain the return address of the client. 38) 39) If the misstatement in a population is larger than tolerable misstatement without considering sampling error, the population will be considered unacceptable. 39) ) 40) 40) Acceptable risk of Incorrect acceptance (ARIA) and sample size are inversely related; that is, as ARIA Increases, sample size decreases. 41) To determine the sampling interval, the population is divided by the confidence factor. 41) 42) 42) Sales transactions are the result of the following five functions in the sales and collection cycle: processing customer orders, granting credit shipping goods, bifling customers, and recording sales. 43) ) 43) Accounting principles do not require companies to record bad debt expense for the amount of customer receivables on the balance sheet they do not expect to collect until the customer has declared bankruptcy or after the customer's account has been turned over to a collection agency. 44) When generating random numbers, the random numbers must be obtained with replacement. 44) 45) Tests of detail tie-in are normally conducted last in the audit of the sales and collections cycle. 45) 46) When using audit sampling for tests of details of balances, the acceptable risk of overreliance must be determined. 46) 47) 47) For audit clients having a treasurer, the auditor should inquire whether the treasurer has reviewed the financial statement disclosures related to cash receipts for relevance and understandability. 48) 48) If the auditor concludes that the computer upper exception rate (CUER) is 5% at an 8% sampling risk, this means that the exception rate in the population is no greater than 5% with an 8% risk of the exception rate exceeding 5%. 49) The auditor should perform procedures to verify the addresses used for the accounts receivable confirmations 49) 5