What is the statistical sampling method used when testing controls?AttributesRisk of incorrect acceptanceis the risk that the sample supports the conclusion that the recorded account balance is not materially misstated when in fact it is materially misstatedAs a result of sampling procedures applied as tests of controls, an auditor incorrectly assesses control risk lower than appropriate. The most likely explanation for this situation is that:the deviation rate in the auditor's sample exceeds the tolerable rate, but the deviation rate in the population us less than the tolerable rate.The risk of assessing control risk too high is the risk that:the assessed level of control risk based on the sample is greater than the true risk based on the actual operating effectiveness of controlExamples of Nonsampling Risk:includes the auditor selecting inappropriate auditing procedures, using inappropriate audit evidence, and failure by the auditor to recognize misstatements in documents examined.In assessing the tolerable rate of deviations of a test of controls that was performed using statistical sampling, an auditor should consider that:deviations from pertinent controls at a given rate ordinarily result in misstatements at lower rate.If an auditor of a nonissuer discovers an unexpectedly high number of deviations during procedures performed on a sample to test management's review and approval of time sheets, then the auditor would most appropriatelyincrease the assessed risk of MM. Specifically, the auditor would increase control risk to reflect that the controls are not operating effectively.Variable sampling is used to determine:whether a given account balance is reasonableAn auditor most likely would use sampling when testing:the process for approval of credit to customers for sales of accountsA decrease in the risk of assessing control risk too low (a decrease in the amount of risk the auditor is willing to accept) will result in:a decrease in sample sizeA decrease in tolerable misstatement will result in:a decrease in sample sizeAs a result of sampling procedures applied as tests of controls, an auditor incorrectly assesses control risk higher than appropriate. The most likely explanation for this situation is that:The deviation rate in the auditor's sample exceeds the tolerable rate, but the deviation rate in the population is less than the tolerable rateA principal advantage of statistical methods of attribute sampling over nonstatistical methods is that:they provide a scientific basis for planning the sample size
