ACC461-Final Exam 100% Correct!!

Risk of overreliance - ANSWER___________is the likelihood that the auditor's sample will provide evidence that the client's controls functioning effectively when the total population would indicate that they are not functioning effectively a. A 10% probability exists that the true population average is less than 60 or more than 70. b. the precision is 10 c. if the desired reliability changes to 95% d. if the desired reliability changes to 95%, the sampling risk decreases. - ANSWERwhich of the following statements it NOT true if the precision interval of a sampling result is a range from 60 to 70 when the reliability is 90%? the maximum rate of deviations permissible by the audit ream without modifying the planned assessed level of control risk. - ANSWERwhich of the following best describes an auditor's tolerable rate of deviation (TRD)? 10th, 15th, 20th, items - ANSWERif systematic random selection is used with a population size of 100, a necessary sample size of 20, and a starting point of 10, the first three items selected for examination would be: 4.5% - ANSWERan auditor wanted to test credit approval on 10,000 sales invoices processed during the year. A sample of 200 invoices was examined and 7 of them were lacking approval. the auditor then determined the upper limited rate of deviation (ULRD) to be 8%. the allowance for sampling risk was a. the auditor would be exposed to the risk of overreliance b. the auditor would decided to reduce the planned degree of reliance on internal control. c. the auditor would increase the extent of further audit procedures d. the auditor would be exposed to a potential efficiency loss. - ANSWERwhich of the following is the LEAST likely outcome when, after conducting a test of control, auditors draw a conclusion that the upper limit rate of deviation is higher than the tolerable rate of deviation? 195 - ANSWERBaily Cox, an audit manager, judged that the rest of controls of the company's 50,000 purchase transactions should be based on a tolerable rate of deviation of 6 percents, a risk of overreliance of 5 percent, and an expected population deviation rate of 3 percent. using AICPA sample size tables, Cox determined that the appropriate sample size in this situation would be 6.9% - ANSWERassume that Dylan Lee found two deviation in a sample of 90 transactions. Using AICPA sample evaluation tables, Lee determined that the upper limited rate of deviation at a 5 percent risk of overreliance is a. it means the audit team's exposure to sampling risk