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25 Cards in this Set

  • Front
  • Back
Acceptable Risk of Assessing Control Risk too Low (ARACR)
The risk that the auditor is willing to take of accepting a control as effective or a rate of monetary misstatements as tolerable when the true population exception rate is greater than the tolerable exception rate
The characteristic being tested for in the population
Attributes Sampling
A statistical, probabilistic method of sample evaluation that results in an estimate of the proportion of items in a population containing a characteristic or attribute of interest
Audit Sampling
Testing less than 100% of a population for the purpose of making inferences about that population
Block Sample Selection
A nonprobabilistic method of sample selection in which items are selected in measured sequences
Computed Upper Exception Rate (CUER)
The upper limit of the probable population exception rate; the highest exception rate in the population at a given ARACR
Directed Sample Selection
A nonprobabilistic method of sample selection in which each item in the sample is selected based on some judgmental criteria established by the auditor
Estimated Population Exception Rate (EPER)
Exception rate the auditor expects to find in the population before testing begins
Exception Rate
The percent of items in a population that include exceptions in prescribed controls or monetary correctness
Haphazard Sample Selection
A nonprobabilistic method of sample selection in which items are chosen without regard to their size, source, or other distinguishing characteristics
Initial Sample Size
Sample size determined by professional judgment (nonstatistical sampling) or by statistical tables (attributes sampling)
Nonprobabilistic Sample Selection
A method of sample selection in which the auditor uses professional judgment to select items from the population
Nonsampling Risk
The risk that the auditor fails to identify existing exceptions in the sample; nonsampling risk (nonsampling error) is caused by failure to recognize exceptions and by inappropriate or ineffective audit procedures
Nonstatistical Sampling
The auditor's use of professional judgment to select sample items, estimate the population values, and estimate sampling risk
Occurrence Rate
The ratio of items in a population that contain a specific attribute to the total number of population items
Probabilistic Sample Selection
A method of selecting a sample such that each population item has a known probability of being included in the sample and the sample is selected by a random process
Random Number Table
A listing of independent random digits conveniently arranged in tabular form to facilitate the selection of random numbers with multiple digits
Random Sample
A sample in which every possible combination of elements in the population has an equal chance of constituting the sample
Representative Sample
A sample with characteristics the same as those of the population
Sample Exception Rate (SER)
Number of exceptions in the sample divided by the sample size
Sampling Distribution
A frequency distribution of the results of all possible samples of a specified size that could be obtained from a population containing some specific parameters
Sampling Risk
Risk of reaching an incorrect conclusion inherent in tests of less than the entire population because the sample is not representative of the population; sampling risk may be reduced by using an increased sample size and an appropriate method of selecting sample items from the population
Statistical Sampling
The use of mathematical measurement techniques to calculate formal statistical results and quantify sampling risk
Systematic Sample Selection
A probabilistic method of sampling in which the auditor calculates an interval (the population size divided by the number of sample items desired) and selects the items for the sample based on the size of the interval and a randomly selected starting point between zero and the length of the interval
Tolerable Exception Rate (TER)
The exception rate that the auditor will permit in the population and still be willing to use the assessed control risk and/or the amount of monetary misstatements in the transactions established during planning