8/19/2019 08 - Audit Assurance and Sampling Techniques.

http://slidepdf.com/reader/full/08-audit-assurance-and-sampling-techniques 1/12

 

Audit Assurance andSampling Techniques.

Presentation to PPAk – UI Students

Theodorus Djoko Sutrisno

8/19/2019 08 - Audit Assurance and Sampling Techniques.

http://slidepdf.com/reader/full/08-audit-assurance-and-sampling-techniques 2/12

 

Audit Assurance Model

Sources of

Assurance

SPECIFIC RISK IDENTIFIED SPECIFIC RISK NOT IDENTIFIED

Do Not Rely on

Controls

Adopt a Control

Reliance Strategy

Adopt a Control Reliance Strategy Do Not Rely on

Controls

Plan and Perfor

Focused  Su!stanti"e

Tests

Plan and Perfor

Tests of Control

Acti"ities t#at Mitigate

Specific Identified

Ris$s%Plan and

Perfor a Basic  &e"el

of Su!stanti"e Tests

Plan and Perfor

Tests of Control

Acti"ities t#at Address

Rele"ant Potential

Errors%Plan and

Perfor a Low  &e"el

of Su!stanti"e Tests

Include Tests of

Control Acti"ities in

our Rotation Plan' !ut

do not Test t#e in

Current (ear%Plan and

Perfor a Basic  &e"el

of Su!stanti"e Tests

Plan and Perfor an

Intermediate &e"el of

Su!stanti"e Tests

In#erent

Assurance

)*)

none

)*)

none

+*)

a,iu

+*)

a,iu

+*)

a,iu

ControlAssurance

)*)none

-*.a,iu

-*)oderate

+*.!asic

)*)none

Su!stanti"e

Assurance

.*)

focused

)*/

!asic

%

lo0

)*/

!asic

-*)

interediate

O"erall

Assurance .*) .*) .*) .*) .*)

8/19/2019 08 - Audit Assurance and Sampling Techniques.

http://slidepdf.com/reader/full/08-audit-assurance-and-sampling-techniques 3/12

 

Perfor Tests of Controls

1 T#e audit approac# re2uires t#e use of attri!ute sapling to test

docuentary e"idence if a saple of docuentation is to !e tested as

t#e principal corro!orati"e e"idence of a control acti"ity

1 Saple si3e depends on t#e re2uired confidence le"el' t#e planned

precision and t#e e,pected occurrence rate of de"iations t#e

relations#ip is suari3ed in t#e follo0ing ta!le

Examination of Documents–Attribute Sampling

8/19/2019 08 - Audit Assurance and Sampling Techniques.

http://slidepdf.com/reader/full/08-audit-assurance-and-sampling-techniques 4/12

 

Perfor Tests of Controls

Allowance for Deviation:

Tests of controls to:

) +

Mitigate specific ris$ 4maximum 

control assurance5 67 /7

Potential errors 0it# no specific

identified ris$ 4moderate controlassurance5 -7 6)

Examination of Documents–Attribute Sampling

8/19/2019 08 - Audit Assurance and Sampling Techniques.

http://slidepdf.com/reader/full/08-audit-assurance-and-sampling-techniques 5/12

 

Perfor Su!stanti"e Tests of DetailNonrepresentative Selection

Do not make

inferences about

unselected items

in the broaderpopulation based

on selected ones.

Obtain assurance

only about the

items selected.

8/19/2019 08 - Audit Assurance and Sampling Techniques.

http://slidepdf.com/reader/full/08-audit-assurance-and-sampling-techniques 6/12

 

Perfor Su!stanti"e Tests of Details

1 8sed priarily as a focused su!stanti"e test

1 Does not relie"e responsi!ility to test reaining population' unless it is

nearly insignificant

1 May !e ore efficient to use t#is et#od for sall populations

Nonrepresentative Selection

8/19/2019 08 - Audit Assurance and Sampling Techniques.

http://slidepdf.com/reader/full/08-audit-assurance-and-sampling-techniques 7/12

 

Perfor Su!stanti"e Tests of DetailRepresentative Saplin!

Infer

characteristics of

entire populationbased on

characteristics of

selected items.

Provides assurance

about items in

population that

have not been

selected.

8/19/2019 08 - Audit Assurance and Sampling Techniques.

http://slidepdf.com/reader/full/08-audit-assurance-and-sampling-techniques 8/12

 

Perfor Su!stanti"e Tests of Details

Sample Selection Techniques

Statistical Saplin! Nonstatistical

Saplin!

Cuulati"e MonetaryAounts 4CMA5 Selection

% e*g* M8S 0or$!oo$

9udgent

T0o Strata 4TS5 Selection Rando Nu!ers

8/19/2019 08 - Audit Assurance and Sampling Techniques.

http://slidepdf.com/reader/full/08-audit-assurance-and-sampling-techniques 9/12

 

Perfor Su!stanti"e Tests of Details

1 Considerations 0#en using a statistical sapling et#od:

; Assurance o!tained can !e precisely 2uantified

; Results in a representati"e saple 0it# less !ias

; Errors found in a statistical saple are pro<ected to t#e reaining

population using a statistical calculation

; Re2uired to pro"ided t#e list of uncorrected errors to anageentand t#e audit coittee= and anageent is re2uired to

represent t#at uncorrected errors are not aterial

Statistical Representative Sampling

8/19/2019 08 - Audit Assurance and Sampling Techniques.

http://slidepdf.com/reader/full/08-audit-assurance-and-sampling-techniques 10/12

 

Perfor Su!stanti"e Tests of Details

1 In representati"e sapling t#e saple si3es are deterined !y using

t#e R factor associated 0it# t#e planned le"el of assurance 4R5 and

Monetary Precision 4MP5 to calculate t#e selection inter"al 495 as

follo0s:

" # $P%R 

1 T#e saple si3e 4n5 is calculated as follo0s:

n # $%"

0#ere M is t#e total onetary aount of t#e population of audit

interest*

1 MP > ?)%@) , Materiality

Statistical Representative Sampling

8/19/2019 08 - Audit Assurance and Sampling Techniques.

http://slidepdf.com/reader/full/08-audit-assurance-and-sampling-techniques 11/12

 

Perfor Su!stanti"e Tests of Details

1 B#ile it is possi!le to use non%statistical representati"e sapling'

consideration ust !e gi"en to t#e follo0ing:

; It is not appropriate to use non%statistical sapling as a eans to reduce

saple si3es 4i*e* 0e need to select at least as any ites as t#e nu!er

t#at 0e 0ould select using statistical sapling et#ods5

; Be need to select all ites in t#e population t#at indi"idually e,ceed 9 4top%

stratu ites5

; To alle"iate any concerns a!out t#e le"el of assurance o!tained fro a non%

statistical saple' 0e can increase t#e saple si3e' use ar!itrary

stratification guidelines' or use a co!ination of t#e t0o*

Non Statistical Representative Sampling

8/19/2019 08 - Audit Assurance and Sampling Techniques.

http://slidepdf.com/reader/full/08-audit-assurance-and-sampling-techniques 12/12

 

E"aluate Results of Su!stanti"e Tests

1 &N'(N $ISSTAT)$)NTS

Be refer to onetary isstateents t#at 0e can 2uantify precisely as$no0n isstateents*

1 *I&)*+ $ISSTAT)$)NTS

&i$ely isstateents are t#ose t#at 0e cannot 2uantify precisely !ased

on t#e a"aila!le e"idence* &i$ely isstateents include:

; Pro<ected pro!a!le isstateents in populations tested t#roug#

representati"e sapling less t#e $no0n isstateents found in

perforing t#ese tests

; Estiated isstateents detected t#roug# su!stanti"e analytical

procedures

; Misstateents in accounting estiates t#at 0e <udge not to !e

reasona!le