If a customer’s account was recorded at $45,000, the audited value was $30,000, and the
sampling interval was $30,000, the projected misstatement would be
A. $10,000.
B. $15,000.
C. $20,000.
D. $30,000.
Which of the following sample selection techniques can be used with statistical
sampling applications?
A. Option A
B. Option B
C. Option C
D. Option D
In an audit test of recorded interest expense and accrued interest, the auditor was able to
detect that the recorded interest expense was higher than the calculations showed. This
may indicate
A. a failure to accrue interest occurred.
B. interest payments are in default.
C. interest payments were charged to another account.
D. interest was paid on an unknown debt or unrecorded liability.
Each of the following automated application controls are designed to ensure that the
input of individual transactions and data is accurate except for
A. check digits.
B. valid sign tests.
C. sequence tests.
D. limit and reasonableness tests.
Negative confirmation of accounts receivable is less effective than positive
confirmation of accounts receivable because
A. a majority of recipients usually lacks the willingness to respond objectively.
B. some recipients may report incorrect balances that require extensive follow up.
C. the auditor cannot infer that all nonrespondents have verified their account
information.
D. negative confirmations do not produce evidential matter that is statistically
quantifiable.
In assessing the objectivity of internal auditors, an independent auditor should
A. evaluate the quality control program in effect for the internal auditors.
B. examine documentary evidence of the work performed by the internal auditors.
C. test a sample of the transactions and balances that the internal auditors examined.
D. determine the organizational level to which the internal auditors report.