Sampling Risk – NBC Institute

AA – Nov 2020 – L2 – Q5 – Audit Documentation

Review a workpaper, explain audit working paper ownership, and describe sampling risk and considerations for reducing sampling risk.

Question

Below is a workpaper prepared and reviewed by members of an audit engagement team.

Client: [Name not provided]
Subject: Trade Payables
Period End: [Not provided]

Objective: To ensure trade payables is fairly stated

Work performed: Selected a sample of 5 trade payables balances as at 31 March and reconciled the supplier statements to the year-end trade payables ledger. Reconciling items were vouched to source documentation.

Results

Required:
a. Review the above workpaper and comment on the missing items. (8 Marks)
b. An accounts personnel at the client office requested that you give him your audit working papers. Explain the ownership, custody, and confidentiality of audit working papers. (3 Marks)
c. Explain sampling and sampling risk. (3 Marks)
d. In order to reduce sampling risk appropriately, ISA 530 requires the auditor to make certain considerations in designing a sample. Explain these considerations. (2 Marks)
e. Explain the advantages and disadvantages of statistical sampling. (4 Marks)

Answer

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Tags: Sampling Risk, Statistical Sampling, Workpaper Review
Level: Level 2

Topic: Audit Documentation
Series: NOV 2020

AA – May 2018 – L2 – Q7 – Audit Sampling and Other Selective Testing Procedures

Discusses key factors in designing audit samples and compares statistical versus non-statistical sampling approaches.

Question

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)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Sampling, Non-Statistical Sampling, Sample Design, Sampling Risk, Statistical Sampling
Level: Level 2

Topic: Audit Sampling and Other Selective Testing Procedures
Series: MAY 2018

AA – Nov 2020 – L2 – Q5 – Audit Documentation

Review a workpaper, explain audit working paper ownership, and describe sampling risk and considerations for reducing sampling risk.

Question

Below is a workpaper prepared and reviewed by members of an audit engagement team.

Client: [Name not provided]
Subject: Trade Payables
Period End: [Not provided]

Objective: To ensure trade payables is fairly stated

Results

Answer

Find Related Questions by Tags, levels, etc.

Tags: Sampling Risk, Statistical Sampling, Workpaper Review
Level: Level 2

Topic: Audit Documentation
Series: NOV 2020

AA – May 2018 – L2 – Q7 – Audit Sampling and Other Selective Testing Procedures

Discusses key factors in designing audit samples and compares statistical versus non-statistical sampling approaches.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Sampling, Non-Statistical Sampling, Sample Design, Sampling Risk, Statistical Sampling
Level: Level 2

Topic: Audit Sampling and Other Selective Testing Procedures
Series: MAY 2018

Question Tag: Sampling Risk

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AA – Nov 2020 – L2 – Q5 – Audit Documentation

Review a workpaper, explain audit working paper ownership, and describe sampling risk and considerations for reducing sampling risk.

AA – May 2018 – L2 – Q7 – Audit Sampling and Other Selective Testing Procedures

Discusses key factors in designing audit samples and compares statistical versus non-statistical sampling approaches.

AA – Nov 2020 – L2 – Q5 – Audit Documentation

Review a workpaper, explain audit working paper ownership, and describe sampling risk and considerations for reducing sampling risk.

AA – May 2018 – L2 – Q7 – Audit Sampling and Other Selective Testing Procedures

Discusses key factors in designing audit samples and compares statistical versus non-statistical sampling approaches.

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AA – Nov 2020 – L2 – Q5 – Audit Documentation

Review a workpaper, explain audit working paper ownership, and describe sampling risk and considerations for reducing sampling risk.

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AA – May 2018 – L2 – Q7 – Audit Sampling and Other Selective Testing Procedures

Discusses key factors in designing audit samples and compares statistical versus non-statistical sampling approaches.

You're reporting an error for "AA – May 2018 – L2 – Q7 – Audit Sampling and Other Selective Testing Procedures"

AA – Nov 2020 – L2 – Q5 – Audit Documentation

Review a workpaper, explain audit working paper ownership, and describe sampling risk and considerations for reducing sampling risk.

You're reporting an error for "AA – Nov 2020 – L2 – Q5 – Audit Documentation"

AA – May 2018 – L2 – Q7 – Audit Sampling and Other Selective Testing Procedures

Discusses key factors in designing audit samples and compares statistical versus non-statistical sampling approaches.

You're reporting an error for "AA – May 2018 – L2 – Q7 – Audit Sampling and Other Selective Testing Procedures"

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