Lesson: Sampling Techniques Practice Questions

Instructor: Nick Palazzolo

This lesson features practice questions on sampling techniques, guiding through multiple choice questions to test the understanding of concepts such as sample size in statistical sampling when testing controls, characteristics of non-statistical samples, and appropriate audit responses in specific situations. The lesson provides a step-by-step analysis of each question, giving detailed explanations of the correct answers and logical reasoning behind eliminating incorrect choices. This is an essential lesson for grasping the practical application of sampling techniques in the auditing process.

Updated: June 22, 2023 Create an account

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Sampling Techniques Overview

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Introduction to Sampling Techniques

Sampling Terms

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Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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Welcome back to the most fun you can have all day. We've got multiple choice questions with our sampling techniques. Diving right in, which of the following statements is ordinarily correct about the sample size in statistical sampling when testing controls? Diving right into the first possibility, as the tolerable deviation rate increases, the sample size should also increase. Thinking about this critically, as the rate at which we tolerate deviations or issues or problems, variances within our testing, the sample size should also increase. I'm going to disagree with that because this is saying, as we can tolerate more issues, we should do more testing, right? Sample size increases, we do more testing. That's contradictory. As we can allow for more issues, we're actually going to do less work, less sampling, less testing. For that reason, I am eliminating letter A. Next up is letter B. The population size has little effect on the sample size. I'm going to be for real. I beat this to death, I know in the lesson. And this is something, this is a phrase you should definitely memorize. You should have familiar, but let's say you weren't. Let's keep reading. We can do a little process of elimination here. Next, the expected population deviation rate, so how much we expect, to simplify it, how much we expect issues to arise, has little effect on determining the sample size. I disagree with that based on the logic from our letter A here. The more we expect issues, the more testing we're going to have, and the less we expect issues, the less testing we're going to have. So that just doesn't really make sense there, so I'm going to eliminate that. And last here, as the population size doubles, the sample size should also

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