# Audit Sampling – CA Inter Audit MCQ

Students should practice these Audit Sampling – CA Inter Audit MCQ based on the latest syllabus.

# Audit Sampling – CA Inter Audit MCQ

Question 1.
Which of the following is more scientific?
(a) Statistical
(b) Non-statistical
(c) Both (a) and (b)
(d) None of the above
(a) Statistical

Question 2.
Which of the following is source of Non-Sampling risk?
(a) Human Mistakes
(b) Applying audit procedures not appropriate to the objectives of audit
(c) Misinterpreting the sample results
(d) All of the above
(d) All of the above

Question 3.
The main advantage of using statistical sampling techniques is that such techniques:
(a) Mathematically measure risk
(b) Eliminate the need for judgmental sampling
(c) Defines the values of tolerable error
(d) all of the them
(a) Mathematically measure risk

Question 4.
A monetary amount set by the auditor in respect of which the auditor seeks to obtain an appropriate level of assurance that the monetary amount set by the auditor is not exceeded by the actual misstatement in the population is known as:
(a) Tolerable Misstatement
(b) Tolerable Rate of Deviation
(c) Performance Materiality
(d) Value Weighted Selection
(a) Tolerable Misstatement

Question 5.
As per the requirement of SA 530, if the audit procedure is not applicable to the selected item, the auditor
(a) shall perform the procedure on a replacement item
(b) shall treat that item as a deviation from the prescribed control, in the case of tests of controls
(c) shall treat that item as a misstatement, in the case of tests of details
(d) none of the above
(a) shall perform the procedure on a replacement item

Question 6.
As per the requirement of SA 530, if the auditor is unable to apply the designed audit procedures, or suitable alternative procedures, to a selected item, the auditor
(a) shall treat that item as a deviation from the prescribed control, in the case of tests of details, or a misstatement, in the case of tests of controls.
(fa) shall treat that item as a deviation from the prescribed control/in the case of tests of controls and tests of details.
(c) shall treat that item as a misstatement in the case of tests of controls and tests of details.
(d) shall treat that item as a deviation from the pre¬scribed control, in the case of tests of controls, or a misstatement, in the case of tests of details
(d) shall treat that item as a deviation from the pre¬scribed control, in the case of tests of controls, or a misstatement, in the case of tests of details

Question 7.
Which of the following factors is (are) considered in determining the sample size for tests of control?
(a) Projected error
(b) Tolerable error
(c) Expected error
(d) Both (b) and (c)
(d) Both (b) and (c)

Question 8.
In the case of tests of details
(a) the projected misstatement plus anomalous mis¬statement, if any, is the auditor’s best estimate of misstatement in the population.
(b) the projected misstatement is the auditor’s best estimate of misstatement in the population.
(c) the anomalous misstatement is the auditor’s best estimate of misstatement in the population.
(d) the projected misstatement plus anomalous misstatement, if any, cannot be the auditor’s best estimate of misstatement in the population.
(a) the projected misstatement plus anomalous mis¬statement, if any, is the auditor’s best estimate of misstatement in the population.

Question 9.
Which of the following is correct:
(a) When the projected misstatement exceeds tolerable misstatement, the sample does not provide a reasonable basis for conclusions about the population that has been tested.
(b) When the projected misstatement plus anomalous misstatement, if any, exceeds tolerable misstatement, the sample does not provide a reasonable basis for conclusions about the population that has been tested.
(c) When the anomalous misstatement exceeds tolerable misstatement, the sample does not provide a reasonable basis for conclusions about the population that has been tested.
(d) When the projected misstatement plus anomalous misstatement, if any, exceeds tolerable misstatement, the sample provides a reasonable basis for conclusions about the population that has been tested.
(b) When the projected misstatement plus anomalous misstatement, if any, exceeds tolerable misstatement, the sample does not provide a reasonable basis for conclusions about the population that has been tested.

Question 10.
Value-weighted selection in which sample size, selection and evaluation results in a conclusion in monetary amounts, is known as:
(a) Haphazard sampling
(b) Monetary Unit Sampling
(c) Stratified Sampling
(d) Interval sampling
(b) Monetary Unit Sampling

Question 11.
Tolerable error, is the maximum monetary error that the auditor is prepared to accept in the population and still conclude that audit objective has been achieved, is directly related to
(a) Sample size
(b) Audit risk
(c) Materiality
(d) Expected error
(c) Materiality

Question 12.
While determining the sample size for tests of controls, an increase in the auditor’s desired level of assurance that the tolerable rate of deviation is not exceeded by the actual rate of deviation in the population will:
(a) require the auditor to increase the sample size
(b) allow the auditor to decrease the sample size
(c) have negligible effect
(d) none of the above
(a) require the auditor to increase the sample size

Question 13.
Which of the following is false?
(a) Audit sampling can be applied using either non-statistical or statistical sampling approaches.
(b) The level of sampling risk that the auditor is willing to accept affects the sample size required
(c) Example of sampling risk include use of inappropriate audit procedures or misinterpretation of audit evidence and failure to recognise a misstatement.
(d) All of the above
(c) Example of sampling risk include use of inappropriate audit procedures or misinterpretation of audit evidence and failure to recognise a misstatement.

Question 14.
While auditing TEN Ltd., CA. Porky divided the whole population of trade receivables balances to be tested in a few separate groups called ‘strata’ and started taking a sample from each of them. He treated each stratum as if it was a separate population. He divided the trade receivables balances of TEN Ltd. for the Financial Year 2017-18 into groups on the basis of personal judgment as follows:

 S. No. Particulars 1 Balances in excess of ₹ 10,00,000 2 Balances in the range of ₹ 7,75,001 to ₹ 10,00,000 3 Balances in the range of ₹ 5,50,001 to ₹ 7,75,000 4 Balances in the range of ₹ 2,25,001 to ₹ 5,50,000 5 Balances ₹ 2,25,000 and below

From the above mentioned groups, CA. Porky picked up different percentage of items for examination from each of the groups, for example, from the top group i.e. balances in excess of ₹ 10,00,000, he selected all the items to be examined; from the second group, he opted for 25% of the items to be examined; from the lowest group, he selected 2% of the items for examination; and so on from rest of the groups. Which one of the following methods of sample selection is he following?
(a) Systematic sampling.
(b) Stratified sampling.
(c) Section sampling.
(d) Selection sampling
(b) Stratified sampling.

Question 15.
While determining the sample size for tests of details, an increase in the auditor’s assessment of the risk of material misstatement will:
(a) require the auditor to increase the sample size
(b) allow the auditor to decrease the sample size
(c) have negligible effect
(d) none of the above
(a) require the auditor to increase the sample size

Question 16.
Which among the following will have negligible effect on determination of sample size in case of tests of details?
(a) The number of sampling units in the population
(b) Stratification of the population when appropriate
(c) An increase in the auditor’s desired level of assurance that tolerable misstatement is not exceeded by actual misstatement in the population
(d) An increase in the use of other substantive procedures directed at the same assertion