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Auditing: Steps to select/evaluate sampling for control test

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a) List the steps involved in selecting and evaluating a nonstatistical or a statistical sample for tests of controls.

b) Identify the professional judgments that must be made associated with each step.

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Your tutorial is 609 words and lists nine steps and the judgment involved in all nine steps.

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List the steps involved in selecting and evaluating a nonstatistical or a statistical sample for tests of controls:

? Determine the test objectives.

Judgment involved: The auditor must figure out what controls to test and potentially rely on. This is based on the preliminary understanding of controls during the audit planning stage.

? Determine procedures to meet objectives.

Judgment involved: The auditor can test a control in several ways. He can observe the process in action. He can review the documentation that the process produced. He can reproduce the activity and see the result. It is the judgment of the auditor to choose which procedure will be used to see if the control is in place. Typically, the choice is based on the important of the assertion that the control supports and how much reliance the auditor plans to place on the control to reduce substantive testing of transactions and balances.

? Make a decision about the audit sampling technique. ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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