AHA MOMENT SUMMARY/ SYNTHESIS CONFUSIONS QUESTIONS

* When designing audit procedures, the

auditor should determine appropriate
means of selecting items for testing. The
means available to the auditor are: Is non-statistical
(a) Selecting all items (100% examination); sampling even
(b) Selecting specific items, and used in practice
(c) Audit sampling. of audit?
* Audit sampling (sampling) involves the
application of audit procedures to less than
100% of items within an account balance or
class of transactions such that all sampling
units have a chance of
Selection
* Terms associated with sampling:
1. population – entire set of data
2. sampling unit – individual items
3. sampling frame – represent units
4. sample – portion of population
5. error – deviations/ misstatements
6. tolerable error – maximum error auditor is
willing to accept
7. stratification – dividing pop’n to groups
Risks Considerations in obtaining evidence:
1. sampling risk – conclusion from sample
is different with conclusion from pop’n
2. non-sampling risk- human errors
General Approaches to sampling:
1. statistical sampling - mathematical
2. non-statistical sampling – judgment
Audit evidence – info obtained to arrive at
conclusions to base audit opinion
1. Underlying accounting data
2. Corroborating information
Sufficiency – competence of evidence,
materiality, risk of account, Experience of
auditor
Appropriateness – Quality, relevance,
reliability