Chapter17 - finalChapter17 - final.docVIP

CHAPTER 17 Multiple-Choice Questions 1. Sampling used for tests of details provides results in terms of: easy a. exception rates. c b. percentages. c. dollars. d. all three of the above. 2. Both sampling and nonsampling risks are associated with: easy a. tests of controls. d b. substantive tests of transactions. c. tests of details of balances. d. all of the above. 3. Tolerable misstatements for overstatements and understatements: easy a. may be different amounts. a b. must be different amounts. c. must be set at the same amount. d. will be determined by the statistical tables. 4. Monetary-unit sampling is most commonly used when: easy a. zero or few exceptions are expected. d b. a dollar result is desired. c. the population data are maintained on computer files. d. all of the above. 5. Monetary-unit sampling is not particularly effective at detecting: easy a. overstatements. b b. understatements. c. overstatements or understatements. d. none of the above. 6. Tests for rates of occurrence are appropriately used in all but which of the following situations? easy a. Testing of internal controls. c b. Substantive testing of transactions. c. Substantive testing of details of balances. d. Tests for rates of occurrence are appropriate for all of the above. 7. Which of the following is not a type of statistical method that provides results in dollar terms? easy a. Variables sampling. b b. Attributes sampling. c. Monetary-unit sampling. d. Sampling with probability proportional to size. 8. Which of the following is not a term relevant to sampling for tests of details? easy a. Acceptable risk of incorrect rejection d b. Analysis of misstatements c. Estimate misstatements in the population d. Define the exception conditions 9. When auditors sample for tests of details of balances, the objective is to determine whether the: easy a. account balance being audited is fairly stated. a b. transac