Audit Sampling \u2013 CA Inter Audit MCQ<\/h1>\n
Question 1.
\nWhich of the following is more scientific?
\n(a) Statistical
\n(b) Non-statistical
\n(c) Both (a) and (b)
\n(d) None of the above
\nAnswer:
\n(a) Statistical<\/p>\n
Question 2.
\nWhich of the following is source of Non-Sampling risk?
\n(a) Human Mistakes
\n(b) Applying audit procedures not appropriate to the objectives of audit
\n(c) Misinterpreting the sample results
\n(d) All of the above
\nAnswer:
\n(d) All of the above<\/p>\n
Question 3.
\nThe main advantage of using statistical sampling techniques is that such techniques:
\n(a) Mathematically measure risk
\n(b) Eliminate the need for judgmental sampling
\n(c) Defines the values of tolerable error
\n(d) all of the them
\nAnswer:
\n(a) Mathematically measure risk<\/p>\n
Question 4.
\nA 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:
\n(a) Tolerable Misstatement
\n(b) Tolerable Rate of Deviation
\n(c) Performance Materiality
\n(d) Value Weighted Selection
\nAnswer:
\n(a) Tolerable Misstatement<\/p>\n
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Question 5.
\nAs per the requirement of SA 530, if the audit procedure is not applicable to the selected item, the auditor
\n(a) shall perform the procedure on a replacement item
\n(b) shall treat that item as a deviation from the prescribed control, in the case of tests of controls
\n(c) shall treat that item as a misstatement, in the case of tests of details
\n(d) none of the above
\nAnswer:
\n(a) shall perform the procedure on a replacement item<\/p>\n
Question 6.
\nAs 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
\n(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.
\n(fa) shall treat that item as a deviation from the prescribed control\/in the case of tests of controls and tests of details.
\n(c) shall treat that item as a misstatement in the case of tests of controls and tests of details.
\n(d) shall treat that item as a deviation from the pre\u00acscribed control, in the case of tests of controls, or a misstatement, in the case of tests of details
\nAnswer:
\n(d) shall treat that item as a deviation from the pre\u00acscribed control, in the case of tests of controls, or a misstatement, in the case of tests of details<\/p>\n
Question 7.
\nWhich of the following factors is (are) considered in determining the sample size for tests of control?
\n(a) Projected error
\n(b) Tolerable error
\n(c) Expected error
\n(d) Both (b) and (c)
\nAnswer:
\n(d) Both (b) and (c)<\/p>\n
Question 8.
\nIn the case of tests of details
\n(a) the projected misstatement plus anomalous mis\u00acstatement, if any, is the auditor\u2019s best estimate of misstatement in the population.
\n(b) the projected misstatement is the auditor’s best estimate of misstatement in the population.
\n(c) the anomalous misstatement is the auditor\u2019s best estimate of misstatement in the population.
\n(d) the projected misstatement plus anomalous misstatement, if any, cannot be the auditor\u2019s best estimate of misstatement in the population.
\nAnswer:
\n(a) the projected misstatement plus anomalous mis\u00acstatement, if any, is the auditor\u2019s best estimate of misstatement in the population.<\/p>\n
Question 9.
\nWhich of the following is correct:
\n(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.
\n(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.
\n(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.
\n(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.
\nAnswer:
\n(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.<\/p>\n
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Question 10.
\nValue-weighted selection in which sample size, selection and evaluation results in a conclusion in monetary amounts, is known as:
\n(a) Haphazard sampling
\n(b) Monetary Unit Sampling
\n(c) Stratified Sampling
\n(d) Interval sampling
\nAnswer:
\n(b) Monetary Unit Sampling<\/p>\n
Question 11.
\nTolerable 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
\n(a) Sample size
\n(b) Audit risk
\n(c) Materiality
\n(d) Expected error
\nAnswer:
\n(c) Materiality<\/p>\n
Question 12.
\nWhile 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:
\n(a) require the auditor to increase the sample size
\n(b) allow the auditor to decrease the sample size
\n(c) have negligible effect
\n(d) none of the above
\nAnswer:
\n(a) require the auditor to increase the sample size<\/p>\n
Question 13.
\nWhich of the following is false?
\n(a) Audit sampling can be applied using either non-statistical or statistical sampling approaches.
\n(b) The level of sampling risk that the auditor is willing to accept affects the sample size required
\n(c) Example of sampling risk include use of inappropriate audit procedures or misinterpretation of audit evidence and failure to recognise a misstatement.
\n(d) All of the above
\nAnswer:
\n(c) Example of sampling risk include use of inappropriate audit procedures or misinterpretation of audit evidence and failure to recognise a misstatement.<\/p>\n
Question 14.
\nWhile auditing TEN Ltd., CA. Porky divided the whole population of trade receivables balances to be tested in a few separate groups called \u2018strata\u2019 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:<\/p>\n