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25 Cards in this Set
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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


Attribute

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
