The Multiple Choice Questions Blog

Which ONE of the following is a factor that an assurance provider should consider when determining the sample size for a test of details?

Select ONE answer:

1. A decrease in the assurance provider’s assessment of the risk of material misstatement
2. The time available to complete the test
3. The skill of the team member assigned to carry out the test
4. An increase in the level of costs that can be passed onto the client

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – The time available to complete the test and the skill of the team member assigned to carry out the test will not affect the number of items to be tested, whereas risk assessment and expected misstatement will.
2. Not correct
3. Not correct
4. Not correct

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Which ONE of the following constitute proper statistical sampling?

Select ONE answer:

1. Testing 100% of the items in a population
2. Testing all items with a certain characteristic
3. Testing 0% of the items in a population
4. Testing items selected randomly from the population

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – Testing 100% of items in a population and testing all items with a certain characteristic are not sampling, as in the former case, the whole population is tested, and in the latter case, the sample is not representative of the whole population.

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following constitute proper statistical sampling?

Select ONE answer:

1. Testing 100% of the items in a population
2. Testing all items with a certain characteristic
3. Testing less than 100% of the items in a population
4. Testing items NOT selected randomly from the population

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – Testing 100% of items in a population and testing all items with a certain characteristic are not sampling, as in the former case, the whole population is tested, and in the latter case, the sample is not representative of the whole population.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following statements is correct?

Select ONE answer:

1. When testing for overstatement, the assurance provider will NOT test items from the accounting records to the supporting documents
2. When testing for understatement, the assurance provider will select items from outside the accounting records and trace to the records
3. When testing for understatement, the assurance provider will test items from the accounting records to the supporting documents
4. When testing for overstatement, the assurance provider will select items from outside the accounting records and trace to the records

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – When testing for understatement (ie, seeking to discover omissions), the assurance provider will select items from outside the accounting records and trace them to the records.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following statements is correct?

Select ONE answer:

1. When testing for overstatement, the assurance provider will test items from the accounting records to the supporting documents
2. When testing for understatement, the assurance provider will test items from the accounting records to the supporting documents
3. When testing for overstatement, the assurance provider will select items from outside the accounting records and trace to the records
4. When testing for understatement, the assurance provider will select items from inside the accounting records and trace to the records

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – When testing for overstatement (ie, seeking to discover errors), the assurance provider will test items from the accounting records to the supporting documents.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.