BU477 Study Guide - Final Guide: Contingent Liability, Patent Infringement, Internal Control
Document Summary
Audit sampling: selective examination of data used when 1) < 100% of items in population under examination are being audited, and 2) each item (sampling unit) in the population could be selected as part of the sample. Population: set of accounts/transactions which auditor wishes to draw a conclusion. Representative sample: sample with same characteristics as population. Sampling risk: isk that audito(cid:396) (cid:396)ea(cid:272)hes i(cid:374)app(cid:396)op(cid:396)iate (cid:272)o(cid:374)(cid:272)lusio(cid:374) (cid:271)/(cid:272) sa(cid:373)ple is(cid:374)(cid:859)t representative of population; inherent part of sampling resulting from testing less than entire population. Exception rate: % of items in population that include exceptions in prescribed controls or monetary correctness. Control sampling risk by adjusting sample size and using appropriate method of selecting sample items in population. Non-sampling risk: risk that auditor makes an incorrect conclusion due to failure to recognize exceptions and/or inappropriate or ineffective audit procedures. Occur b/c audito(cid:396)s do(cid:374)(cid:859)t u(cid:374)de(cid:396)sta(cid:374)d (cid:449)hat a(cid:374) e(cid:454)(cid:272)eptio(cid:374) is o(cid:396) (cid:271)e(cid:272)ause audito(cid:396) is (cid:271)o(cid:396)ed and tired.
