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NEW QUESTION: 1
----
A. Option A
B. Option B
C. Option D
D. Option C
Answer: D
NEW QUESTION: 2
Which of the following statements is correct concerning statistical sampling in tests of controls?
A. There is an inverse relationship between the sample size and the tolerable rate.
B. Deviations from control procedures at a given rate usually result in misstatements at a higher rate.
C. As the population size doubles, the sample size should also double.
D. The qualitative aspects of deviations are not considered by the auditor.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
Choice "D" is correct. As the auditor's tolerable rate decreases (the auditor cannot accept as large an error
rate), the sample size increases and vice-versa. Therefore, there is an inverse relationship between the
sample size and the tolerable rate.
Choice "A" is incorrect. Deviations from control procedures at a given rate usually result in misstatements
at a lower rate (i.e., not every deviation from an internal control procedure will necessarily result in a
misstatement in the financial statements).
Choice "B" is incorrect. When using statistical sampling for tests of controls, changing the size of the
population has very little effect on the sample size (unless the population is very small).
Choice "C" is incorrect. Consideration should be given to the qualitative aspects of deviations, including
the nature and cause of deviations and the possible relationship of the deviations to other phases of the
audit.
NEW QUESTION: 3
Your software acquisition policy includes the following statements:
*Receiving must be managed.
*Purchasing must be centralized. You need to improve the software acquisition policy. Which process should you add to the policy?
A. Collect all historical purchasing information.
B. Purchase from only approved software vendors.
C. Purchase from any software vendor.
D. Collect all historical proof of licenses (POLs).
Answer: B
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