Set: Auditing--Ch.'s 8&9

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All 20 Terms

Term Definition
Allowance for Sampling Risk the uncertainty that results from sampling; the difference between the expected mean of the population and the tolerable deviation or misstatement
Attribute Sampling sampling used to estimate the proportion of a population that possesses a specified characteristic
Audit Sampling the application of an audit procedure to less than 100 percent of the items within an account or class of transactions for the purpose of evaluating some characteristic of the balance or class
Classical Variables Sampling the use of normal distribution theory to estimate the dollar amount of misstatement for a class of transactions or an account balance
Desired Confidence Level the probability that the true but unknown measure of the characteristic of interest is within specified limits
Expected Population Deviation Rate the deviation rate that the auditor expects to exist in the population
Monetary-Unit Sampling attribute sampling techniques used to estimate the dollar amount of misstatement for a class of transactions or an account balance
Nonsampling Risk the possibility that the auditor may use inappropriate audit procedures, fail to detect a misstatement when applying an audit procedure, or misinterpret an audit result
Nonstatistical Sampling audit sampling that relies on the auditor's judgment to determine sample size, select the sample, and/or evaluate the results for the purpose of reaching a conclusion about the population
Risk of Incorrect Acceptance the risk that the sample supports the conclusion that the control is operating effectively when it is not or that the recorded account balance is not materially misstated when it is materially misstated
Risk of Incorrect Rejection the risk that the sample supports the conclusion that the control is not operating effectively when it actually is or that the recorded account balance is materially misstated when it is not materially misstated
Sampling Risk the possibility that the sample drawn is not representative of the population and that, as a result, the auditor reaches an incorrect conclusion about the reliability of the control, the account balance, or class of transactions based on the sample
Sampling Unit the individual member of the population being sampled
Statistical Sampling sampling that uses the laws of probability to select and evaluate the results of an audit sample, thereby permitting the auditor to quantify the sampling risk for the purpose of reaching a conclusion about the population
Tolerable Deviation Rate the maximum deviation rate from a prescribed control that the auditor is willing to accept without altering the planned assessed level of control risk
Confidence Bound a measure of sampling risk added and subtracted to the projected misstatement to form a confidence interval
Expected Misstatement the amount of misstatement that the auditor believes exists in the population
Projected Misstatement the extrapolation of sample results to the population; represents the auditors "best estimate" of the misstatement in the sampling population
Tolerable Misstatement the amount of planning materiality that is allocated to a financial statement account
Upper Misstatement Limit the total of the projected misstatement plus the allowance for sampling risk

Set Information

Terms 20
Creator Steve_Heizmann
Created October 14, 2007
Groups None
Tags sampling, audit
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Most Missed Words

  1. Allowance for Sampling Risk → the uncertainty that results from sampling; the difference between the expected mean of the population and the tolerable deviation or misstatement - 6 misses
  2. Desired Confidence Level → the probability that the true but unknown measure of the characteristic of interest is within specified limits - 5 misses
  3. Expected Population Deviation Rate → the deviation rate that the auditor expects to exist in the population - 4 misses
  4. Expected Misstatement → the amount of misstatement that the auditor believes exists in the population - 3 misses
  5. Audit Sampling → the application of an audit procedure to less than 100 percent of the items within an account or class of transactions for the purpose of evaluating some characteristic of the balance or class - 2 misses
  6. Classical Variables Sampling → the use of normal distribution theory to estimate the dollar amount of misstatement for a class of transactions or an account balance - 2 misses
  7. Nonstatistical Sampling → audit sampling that relies on the auditor's judgment to determine sample size, select the sample, and/or evaluate the results for the purpose of reaching a conclusion about the population - 2 misses