ADA Statistical Sampling and Hypothesis Testing

Question 1

Which sampling method ensures every item in the population has an equal chance of being selected for audit testing?

Accepted Answer

Simple random sampling

Answer

Judgmental sampling

Answer

Stratified sampling

Answer

Cluster sampling

Question 2

In hypothesis testing for audit analytics, what does a p-value of 0.03 indicate when the significance level is 0.05?

Accepted Answer

Reject the null hypothesis

Answer

Fail to reject the null hypothesis

Answer

Increase the sample size

Answer

Accept the alternative hypothesis as fact

Question 3

Which type of sampling divides a population into subgroups and samples from each subgroup proportionally?

Accepted Answer

Stratified random sampling

Answer

Systematic sampling

Answer

Cluster sampling

Answer

Monetary unit sampling

Question 4

A Type I error in audit hypothesis testing occurs when the auditor:

Accepted Answer

Concludes a misstatement exists when it does not

Answer

Fails to detect a material misstatement that exists

Answer

Uses an incorrect significance level

Answer

Selects too small a sample size

Question 5

Monetary Unit Sampling (MUS) is best suited for audit populations where:

Accepted Answer

Higher-value items should have a greater chance of selection

Answer

Errors are expected to be large in number but small in value

Answer

The population contains zero balances only

Answer

Population size is too small for statistical methods

Question 6

When determining sample size for statistical sampling in an audit, increasing the desired confidence level will:

Accepted Answer

Increase the required sample size

Answer

Decrease the required sample size

Answer

Have no effect on sample size

Answer

Reduce tolerable misstatement