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21.The 1000 accounts receivable of Winco Company have a total

Question : 21.The 1000 accounts receivable of Winco Company have a total : 1412424

 

 

21.The 1000 accounts receivable of Winco Company have a total book value of $20,000 (Average book value = $20). Bob Duffo, CPA, has selected and audited a sample of 50 accounts with the following mean values:

 

1. Book value of $19.

2. Audited value of $19.60.

 

What is the estimated total audited value using difference estimation sampling? 

 

 

A. $19,387.

 

B. $19,400.

 

C. $19,600.

 

D. $20,600.

 

 

 

 

22.If all other factors specified in an attributes sampling plan remain constant, decreasing the tolerable rate and decreasing the risk of assessing control risk too low would have what effect on sample size? 

 

 

A. Increase.

 

B. Remain the same.

 

C. Decrease.

 

D. Indeterminate, depends upon exact change being made.

 

 

 

 

23.If all other factors specified in an attributes sampling plan remain constant, decreasing the tolerable rate and increasing the estimated population deviation rate would have what effect on sample size? 

 

 

A. Increase.

 

B. Remain the same.

 

C. Decrease.

 

D. Indeterminate, depends upon exact change being made.

 

 

 

 

24.An increase in the tolerable misstatement has what effect on the planned allowance for sampling risk? 

 

 

A. Increases.

 

B. Decreases.

 

C. No effect.

 

D. Indeterminate.

 

 

 

 

25.Which of the following is  generally used for selecting samples? 

 

 

A. Random number tables.

 

B. Random number generators.

 

C. Physical representation numbers.

 

D. Systematic selection.

 

 

 

 

26.In performing a test of a control last year the auditors specified a tolerable deviation rate of X percent. This year the auditors have specified a tolerable rate of less than X percent. Assuming that all other factors remain the same, which of the following is true regarding the relationship between this year's sample size compared to last year's sample size? 

 

 

A. This year's sample is larger than last year's sample.

 

B. This year's sample is smaller than last year's sample.

 

C. This year's sample is equal to last year's sample.

 

D. This year's sample is indeterminate in relation to last year's sample.

 

 

 

 

27.The auditor using nonstatistical attributes sampling, but who nevertheless has chosen the sample in conformity with random selection procedures: 

 

 

A. Need not consider the risk of assessing control risk too low.

 

B. Has committed a nonsampling error.

 

C. Will have to use discovery sampling techniques to evaluate the results.

 

D. Should compare the deviation rate of the sample to the tolerable rate.

 

 

 

 

28.When performing tests of controls over authorization of cash receipts, which of the following sampling methods would be most appropriate? 

 

 

A. Attributes.

 

B. Ratio.

 

C. Stratified.

 

D. Variables.

 

 

 

 

29.Which of the following statistical sampling techniques involves taking samples in a series of stages? 

 

 

A. Systematic sampling.

 

B. Sequential sampling.

 

C. Continuous sampling.

 

D. Multiple location sampling.

 

 

 

 

30.Which of the following is generally  true about statistical sampling as compared to nonstatistical sampling? 

 

 

A. Statistical samples are more representative of the population.

 

B. Statistical sample plans involve additional costs of evaluation.

 

C. Statistical sampling allows a more objective evaluation of sample results.

 

D. Statistical sampling may assist the auditors in designing more efficient samples.

 

 

 

 

 

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