Term
| what two times is sampling used? |
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Definition
| 1. study and eval of IC (attribute sampling). 2. substantive procedures (variables sampling). |
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Term
| sampling risk. how can it be controlled? |
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Definition
| non-representative sample. risk that the decision made based on the sample differs from the decision that would have been made based on entire population. bigger sample, math to evaluate results, making sure each item in population has equal chance of being selected. |
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Term
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Definition
| error in judgment or execution. incorrect conclusion is reached but the sample was representative of the population |
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Term
| precision (tools to evaluate sample results) |
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Definition
| a "range" of + and - from the sample results. allowance for sampling risk. the wider the range, the more confident, but the less precise.. |
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Term
| reliability (tools to eval sample results) |
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Definition
| confidence. higher sample size creates more confidence |
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Term
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Definition
| when evaluating the sample results, auditors must consider the max deviation rate that might exist. = how badly could we have missed it? worst case scenario. |
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Term
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Definition
| how badly off an account can be and still not be a material misstatement |
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Term
| 4 types statistic and non-statistic sampling tecniques |
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Definition
| 1. unrestricted random selection, 2. systematic random selection, 3. haphazard selection (JSel) 4. block selection |
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Term
| what if an item of sample is 'lost and gone forever?' |
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Definition
| = breakdown of controls, expand sample |
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Term
| 2 concerns in assessing ctrl risk |
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Definition
| 1. risk of assessing ctrl risk too high 2. risk of assessing ctrl risk too low |
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Term
| risk of assessing ctrl risk too high |
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Definition
| decreases efficiency. we thought controls were broken, but they werent. 1. risk of underreliance 2. risk of incorrect rejection |
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Term
| risk of assessing ctrl risk too low |
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Definition
| 1. risk of overreliance 2. risk of incorrect acceptance. decreases effectiveness. we thought controls were fine, but they werent |
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