Sampling

If the population of Administrative expenses was $40 million and the invoices tested summed to $4 million but you identified $100,000 of misstatements in your testing - what would be the projected value of misstatements?

$100,000

$1 million

$10 million

$4 million

If you had $1.5 million of projected misstatements and your acceptable tolerable misstatement was $750,000 - what would you do next?

Conclude that the test was effective.

Conclude that the test was ineffective and perform no further audit procedures.

Request management to adjust $1.5 million.

Request management to adjust $750,000.

When is it most appropriate to use sampling to test a population?

When there are a few high value items within the population.

When all items within the population have similar characteristics.

When there is sufficient audit evidence from other audit procedures performed.

When testing the entire population is practical.

What affects the size of the sample we test?

The client's profit for the financial year.

How many invoices we want to tick through.

Materiality of $5 million.

The amount of time we have to perform the test.

From a transaction listing that includes the dollar value of many sales invoices, what would be the most appropriate method of sampling to use?

Haphazard selection.

Monetary Unit Sampling.

Random selection.

No sampling - perform a different procedure.

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