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wo accountancy students from a University have been asked to write a term paper on “the reasons why external auditors resort to sampling when conducting the audit of a large entity.” The students are of the opinion that they do not understand why this should be the case, if auditors focus on their work.
They believe statistical sampling is not always good for auditing, especially when a population consists of a small number of large items. It may be appropriate to apply audit tests to the entire population as all the items in the population may not share common characteristics. Added to this, they do not agree that samples could be representative of the population and also reflect the characteristics of the population. There is therefore the risk that the auditors may not reach a correct decision as against when the entire population is tested.
Furthermore, they said that they were confused on how the auditors will work on samples in such a way that all items in the population will be given equal chance of being selected and the key decisions that need to be made for effective sample design.
As an ICAN Professional examination candidate who has just finished reading Audit Sampling (ISA 530), you now saw it as an opportunity to recall and explain what you have read. You are excited to explain the above to the students.
Required:
a. Highlight key decisions to be made to influence the sample size. (4 Marks)
b. Outline the advantages and disadvantages of using statistical sampling. (8 Marks)
c. Explain the sample selection methods that will give equal chance to all the items in the population. (3 Marks)
d. Illustrate what the auditors should do when performing procedures on the samples. (5 Marks)
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Auditors do not normally check 100% of transactions and balances that go into the production of financial statements. Auditors usually carry out a sampling test. ISA 530 distinguishes between statistical and non-statistical sampling approaches.
Required: a. Explain THREE key factors the auditor has to take into consideration in designing a sample. (6 Marks) b. Distinguish between statistical and non-statistical sampling approaches. (4 Marks) c. State TWO advantages and TWO disadvantages of statistical sampling approach. (5 Marks)
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ISA 530 Audit Sampling states that the objective of the auditor, when using audit sampling, is to provide a reasonable basis for the auditor to draw conclusions about the population from which the sample is selected.
Required:
Explain the difference between statistical sampling and non-statistical sampling and describe FOUR methods of sampling selection.
Find Related Questions by Tags, levels, etc.
ISA 530 “Audit Sampling” states that the objective of the auditor, when using audit sampling, is to provide a reasonable basis for the auditor to draw conclusions about the population from which the sample is selected.
Required:
Explain the difference between statistical sampling and non-statistical sampling.
Find Related Questions by Tags, levels, etc.
There are a number of key procedures which auditors should perform if they wish to rely on internal controls and reduce the level of substantive testing they perform. These include:
i) Walk-through tests
ii) Audit Sampling
Required:
Briefly explain each of the procedures listed above.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
wo accountancy students from a University have been asked to write a term paper on “the reasons why external auditors resort to sampling when conducting the audit of a large entity.” The students are of the opinion that they do not understand why this should be the case, if auditors focus on their work.
They believe statistical sampling is not always good for auditing, especially when a population consists of a small number of large items. It may be appropriate to apply audit tests to the entire population as all the items in the population may not share common characteristics. Added to this, they do not agree that samples could be representative of the population and also reflect the characteristics of the population. There is therefore the risk that the auditors may not reach a correct decision as against when the entire population is tested.
Furthermore, they said that they were confused on how the auditors will work on samples in such a way that all items in the population will be given equal chance of being selected and the key decisions that need to be made for effective sample design.
As an ICAN Professional examination candidate who has just finished reading Audit Sampling (ISA 530), you now saw it as an opportunity to recall and explain what you have read. You are excited to explain the above to the students.
Required:
a. Highlight key decisions to be made to influence the sample size. (4 Marks)
b. Outline the advantages and disadvantages of using statistical sampling. (8 Marks)
c. Explain the sample selection methods that will give equal chance to all the items in the population. (3 Marks)
d. Illustrate what the auditors should do when performing procedures on the samples. (5 Marks)
Find Related Questions by Tags, levels, etc.
Auditors do not normally check 100% of transactions and balances that go into the production of financial statements. Auditors usually carry out a sampling test. ISA 530 distinguishes between statistical and non-statistical sampling approaches.
Required: a. Explain THREE key factors the auditor has to take into consideration in designing a sample. (6 Marks) b. Distinguish between statistical and non-statistical sampling approaches. (4 Marks) c. State TWO advantages and TWO disadvantages of statistical sampling approach. (5 Marks)
Find Related Questions by Tags, levels, etc.
ISA 530 Audit Sampling states that the objective of the auditor, when using audit sampling, is to provide a reasonable basis for the auditor to draw conclusions about the population from which the sample is selected.
Required:
Explain the difference between statistical sampling and non-statistical sampling and describe FOUR methods of sampling selection.
Find Related Questions by Tags, levels, etc.
ISA 530 “Audit Sampling” states that the objective of the auditor, when using audit sampling, is to provide a reasonable basis for the auditor to draw conclusions about the population from which the sample is selected.
Required:
Explain the difference between statistical sampling and non-statistical sampling.
Find Related Questions by Tags, levels, etc.
There are a number of key procedures which auditors should perform if they wish to rely on internal controls and reduce the level of substantive testing they perform. These include:
i) Walk-through tests
ii) Audit Sampling
Required:
Briefly explain each of the procedures listed above.
Find Related Questions by Tags, levels, etc.
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