The following apply to difference estimation variables sampling. Choose the best response.

a. The auditor’s failure to recognize an error in an amount or an error in an internal control data-processing procedure is described as a:

(i) Statistical error

(ii) Sampling error

(iii) Standard error of the mean

(iv) Nonsampling error

b. An auditor makes separate compliance and substantive tests in the accounts payable area, which has good internal control. If the auditor uses statistical sampling for both these tests, the confidence level established for the substantive test is normally:

(i) The same as that for tests of compliance

(ii) Greater than that for tests of compliance

(iii) Less than that for tests of compliance

(iv) Totally independent of that for tests of compliance

c. How should an auditor determine the precision required in establishing a statistical sampling plan?

(i) By the materiality of an allowable margin of error the auditor is willing to accept

(ii)By the amount of reliance the auditor will place on the results of the sample 

(iii) By reliance on a table of random numbers 

(iv) By the amount of risk the auditor is willing to take that material errors will occur in the accounting process