Reference no: EM132427091

Subject : Advanced Auditing Topics

Question No.1

200 words and reference

Risk of incorrect rejection (Type I or alpha): the risk that the sample supports the conclusion that the recorded account balance is materially misstated when it is not materially misstated. What is the greater danger of type 1 error?

Question No. 2

Please respond the below statement. 200 words and reference:

Audit sampling is the application of an audit procedure to less than 100 percent of the items within an account balance or class of transactions for the purpose of evaluating some characteristic of the balance or class. The justification for accepting some uncertainty from sampling is due to the trade-off between the cost to examine all of the data and the cost of making an incorrect decision based on a sample of the data.

Sampling Risk is the risk that the sample may not be truly representative of the population. In other words, the chance of an erroneous conclusion that the auditor takes by examining a subset of the population, rather than the entire population. Discuss the concept of type 1 and type 2 error in a sample?

Question No. 3

Please respond the below statement. 200 words and reference.

Attachment:- Advanced Auditing Topics.rar