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CH 10
CH 10
Audit Sampling
Introduction
Overview of Audit Sampling
Definition
Population
Nonsampling and Sampling Risk
Assessing control risk to high
Assessing control risk to low
Sampling Risk: Substantive
Testing
•Risk of incorrect acceptance
•Risk of incorrect rejection
Selecting a Sampling Approach
•Statistical sampling
•Nonstatistical sampling
Sampling to Test Controls
•Attribute estimation sampling
Substantive Sampling
Considerations
Basic Steps:
•Specify audit objective
•Define a misstatement
•Define the population
•Choose sampling method
•Determine sample size
•Select the sample
•Audit the selected items
•Evaluate the sample results
•Perform follow-up work as necessary
•Document
Specify the Audit Objective
•Combination of sampling and other audit
procedures.
•Sampling used in two ways:
•Determine reasonableness of an account
balance.
•Estimate some amount.
Define Misstatements
•Misstatements should be defined before beginning
to:
•preclude rationalizing away misstatements
•provide guidance to the audit team