Get All You Need To Know About Audit Sampling

After having established the audit objectives to be achieved and the audit procedures which are most likely to achieve them; define what constitutes an error. determine the population from which items will be selected; explore the nature of the population; select the sampling method and approach;

Sampling in Substantive Tests of Details The relationship of the sample to the relevant audit objective. Tolerable misstatement. ... The auditor's allowable risk of incorrect acceptance. Characteristics of the population, that is, the items comprising the account balance or class of transactions of interest.

The audit sampling process involves conducting audit of financial statements in three phases – planning, execution, and evaluation. In the planning phase, the auditor determines the sample size, selects the sampling method, and identifies the sample selection criteria.

Key Takeaways Audit sampling is a technique used by auditors to select a representative sample of data from a larger population to obtain reasonable assurance that the financial statements are free of material misstatements. The audit sampling process involves three main phases: planning, execution, and evaluation.

The steps involved in monetary unit sampling are to: determine a sample size. select the sample. perform the audit procedures. evaluate the results and arriving at a conclusion about the population.

The audit process consists of the following 4 phases: Planning. Fieldwork. Reporting. Follow-up.

Key items. The auditor may decide to select specific items within a population because they are important to accomplishing the objective of the audit procedure or exhibit some other characteristic, e.g., items that are suspicious, unusual, or particularly risk-prone or items that have a history of error.

23 To determine the number of items to be selected in a sample for a particular test of details, the auditor should consider the tolerable misstate- ment and the expected misstatement, the audit risk, the characteristics of the population, the assessed risk of material misstatement (inherent risk and con- trol risk), ...