Content area
Full Text
Key words: audit, sampling, materiality, testing.
Abstract: In performing the evidence search, auditors carry out sufficient appropriate work to be reasonably certain that audit conclusions are soundly based and at a reasonable cost. At the outset auditors decide what approach they will use and when it is likely to be appropriate to use audit sampling, taking into account the criteria of sufficiency, relevance and reliability.
(ProQuest: ... denotes formula omitted.)
The audit process is a search for evidence to enable auditors to form an opinion. In carrying out die evidence search, auditors are expected to be efficient as well as professionally effective in conducting the audit process. In otìier words, tìiey are expected to carry out sufficient appropriate work to be reasonably certain mat audit conclusions are soundly based but at a reasonable cost. Auditors have developed a number of procedures to achieve bom aims, one of which - audit sampling - involves the auditors in selecting a sample from the entire set of data. Paragraph 2 of the ISA 530, "Audit sampling and other means of testing" states simply: 'When designing audit procedures, me auditor should determine appropriate means for selecting items for testing so as to gather sufficient appropriate audit evidence to meet the objectives of me audit procedures." It describes audit sampling as involving:
* the application of audit procedures to less man 100% of items within a class of transactions or account balance such that all sampling units have a chance of selection. This will enable the auditor to obtain and evaluate audit evidence about some characteristic of the items selected in order to form or assist in forming a conclusion concerning the population from which the sample is drawn. Audit sampling can use cither a statistical or a nonstatistical approach.
It should be recognized mat auditors can obtain evidence in a number of different ways by using, for instance, analytical review and observation, so mat audit sampling is just one procedure among many. When deciding which procedure to use auditors must bear in mind me objective(s) they are trying to achieve, the persuasiveness of the evidence mey will obtain by using the particular procedure and the costs of applying the various procedures. At me outset auditors must decide...