Audit Sampling and Other Selective Testing Procedures

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

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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 2018 – L2 – Q3 – Planning an Audit

Explains materiality in accordance with ISA 320 and addresses steps for materiality and receivable circularization in an audit.

Question

Holy Family Limited is a trading company that deals in furniture. The company is a major distributor to Happy Couples Limited that manufactures the furniture. The turnover of the company as at December 31, 2017, was ₦120,000,000. Also, in the statement of financial position is a figure of ₦2,500,000 that represents trade receivables. The auditor informs the Managing Director of the need to circularize the debtors. The Managing Director feels indifferent to circularization, saying that the figure of ₦2,500,000 is not material with a turnover of ₦120,000,000.

Required:
a. As an auditor, explain to the Managing Director the concept of materiality in accordance with ISA 320.
(5 Marks)

b. State the steps you are expected to take as regards materiality when planning and performing an audit.
(5 Marks)

c. Explain to him why you should confirm receivable balances through circularization.
(3 Marks)

d. If you decide to circularize only a sample of receivables, list the types of accounts that should not be overlooked in selecting the sample.
(7 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Planning, Circularization, ISA 320, Materiality, Receivables
Level: Level 2

Topic: Audit Sampling and Other Selective Testing Procedures, Planning an Audit
Series: NOV 2018

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

AA – Nov 2018 – L2 – Q3 – Planning an Audit

Explains materiality in accordance with ISA 320 and addresses steps for materiality and receivable circularization in an audit.

Question

Required:
a. As an auditor, explain to the Managing Director the concept of materiality in accordance with ISA 320.
(5 Marks)

b. State the steps you are expected to take as regards materiality when planning and performing an audit.
(5 Marks)

c. Explain to him why you should confirm receivable balances through circularization.
(3 Marks)

d. If you decide to circularize only a sample of receivables, list the types of accounts that should not be overlooked in selecting the sample.
(7 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Planning, Circularization, ISA 320, Materiality, Receivables
Level: Level 2

Topic: Audit Sampling and Other Selective Testing Procedures, Planning an Audit
Series: NOV 2018

Topic: Audit Sampling and Other Selective Testing Procedures

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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.

AA – Nov 2018 – L2 – Q3 – Planning an Audit

Explains materiality in accordance with ISA 320 and addresses steps for materiality and receivable circularization in an audit.

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 2018 – L2 – Q3 – Planning an Audit

Explains materiality in accordance with ISA 320 and addresses steps for materiality and receivable circularization in an audit.

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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.

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AA – Nov 2018 – L2 – Q3 – Planning an Audit

Explains materiality in accordance with ISA 320 and addresses steps for materiality and receivable circularization in an audit.

You're reporting an error for "AA – Nov 2018 – L2 – Q3 – Planning an Audit"

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 2018 – L2 – Q3 – Planning an Audit

Explains materiality in accordance with ISA 320 and addresses steps for materiality and receivable circularization in an audit.

You're reporting an error for "AA – Nov 2018 – L2 – Q3 – Planning an Audit"

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