ASA 530 requires auditor to; If the auditor is unable to apply the designed audit procedures, or suitable alternative procedures, to a selected item, the auditor shall treat that item as a deviation from the prescribed control, in the case of tests of controls, or a misstatement, in the case of
tests of details. the auditor shall obtain a high degree of certainty that such misstatement or deviation is not representative of the population. The auditor shall obtain this degree of certainty by performing
additional audit procedures to obtain sufficient appropriate audit evidence that the misstatement or deviation does not affect the remainder of the population.
ASA 530 applies when the auditor has decided to use audit sampling in performing audit ISA 530 deals with the auditor’s use of statistical and non-statistical sampling when designing and selecting the audit sample, performing tests of controls and tests of details, and evaluating the results from the sample. ASA 530 Audit Sampling ObjectiveThe 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. ASA 530 – DefinitionsAudit sampling (sampling) – DefinitionThe application of audit procedures to less than 100% of items within a population of audit relevance such that all sampling units have a chance of selection in order to provide the auditor with a reasonable basis on which to draw conclusions about the entire population. Population –DefinitionThe entire set of data from which a sample is selected and about which the auditor wishes to draw conclusions. Sampling risk –DefinitionThe risk that the auditor’s conclusion based on a sample may be different from the conclusion if the entire population were subjected to the same audit Sampling risk can lead to two types of erroneous conclusions:
Non-sampling risk –DefinitionThe risk that the auditor reaches an erroneous conclusion for any reason not related to sampling risk. Anomaly –DefinitionA misstatement or deviation that is demonstrably not representative of misstatements or deviations in a population. Sampling unit –DefinitionThe individual items constituting a population. Statistical sampling –DefinitionAn approach to sampling that has the following characteristics:
A sampling approach that does not have characteristics (i) and (ii) is considered non-statistical sampling. Stratification –DefinitionThe process of dividing a population into sub- populations, each of which is a group of sampling units which have similar characteristics (often monetary value). Tolerable misstatement –DefinitionA monetary amount set by the auditor in respect of which the auditor seeks to obtain an appropriate level of assurance that the monetary amount set by the auditor is not exceeded by the actual misstatement in the population. Tolerable rate of deviation –DefinitionA rate of deviation from prescribed internal control procedures set by the auditor in respect of which the auditor seeks to obtain an appropriate level of assurance that the rate of deviation set by the auditor is not exceeded by the actual rate of deviation in the population. What is audit sampling and explain the methods of audit sampling?Audit sampling is an investigative tool in which less than 100% of the total items within the population of items are selected to be audited. It is an auditing technique that provides supporting evidence that allows auditors to issue audit opinions without having to audit every single item and transaction.
What do you mean by sampling in audit?Audit sampling is the application of an audit procedure to less than 100 percent of the items within an account balance or class of transactions for the purpose of evaluating some characteristic of the balance or class.
Why audit sampling is important in audit procedures?Audit Sampling is a technique widely adopted in different types of financial and non-financial audit processes. It is a technique that makes it possible for the auditor to obtain sufficient audit evidence to form valid conclusions and provide an opinion on the controls audited in the Compliance process.
Which SA deals with audit samples?SA 500 provides guidance on the means available to the auditor for selecting items for testing, of which audit sampling is one means. 3. This SA is effective for audits of financial statements for periods beginning on or after April 1, 2009.
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