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1 Audit Sampling
AUD 08
3 Means of Selection
100% Testing
Small no. of high value items
Presence of significance risk
Feasible through CAATs
Selection of specific items
Audit Sampling
4 Audit Sampling
Involves application the application of audit procedures to less than 100% of the items within a
class of transactions or account balance where samples selected are expected to be representative
of the population.
All sampling units have a chance of selection.
Reasonable basis of the auditor to base conclusion about the population.
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14 Attribute Sampling
Used in test of controls
Reaches a conclusion in terms of occurrence rate or exception rate
Peso amounts are irrelevant
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22 7. Evaluate the Results & Document the Sampling
Procedure
Upper deviation limit
Represents sample deviation rate plus allowance for sampling risk.
The upper deviation limit is found by referring into a sampling table taking into consideration
the allowable risk of assessing control risk too low and no. of deviations.
If Upper Limit > Tolerable Rate = ICS is not effective.
25 Variables Sampling
Used in substantive test procedures
Applies to test of details only.
Reaches a conclusion in terms of peso amounts.
Materiality threshold applies.
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Necessary before comparing the misstatements noted in sample results with materiality.
29 Probability Proportional to Size (PPS) Sampling
Uses attribute sampling theory
The auditor selects individual pesos and audit the balances, transaction or document (logical
units) that include the individual pesos selected.
The larger the size of logical unit the larger the probability of selection.
Applicable when few or no errors are expected and testing for overstatements.
30 End of Discussion
QUESTIONS