Overview
When performing an audit, an auditor bases their opinion on whether the financial statements are free from material misstatement on various tests on the underlying account balances and class of transactions. Receive detailed guidance and methods for performing these analytical techniques and explore the different sampling applications used in a financial statement/compliance audit.
Some balances, such as debt or cash, may be tested 100 percent. Still, the auditor will commonly use sampling to test a population subset to obtain sufficient evidence to support the opinion. The auditor will also use sampling when testing control activities to conclude the effectiveness of the controls. For other account balances and transactions, auditors may perform analytical procedures as substantive tests instead of or alongside sampling techniques. It is important to properly design and perform analytical procedures to ensure an effective and efficient audit engagement.
Objectives
- Discuss the professional requirements related to sampling applications
- Differentiate attribute testing for tests of controls or compliance from variable sampling for substantive testing
- Explain special considerations related to internal control and compliance testing in a Single or Program-Specific Audit
- Performing effective preliminary analytical procedures in the risk assessment process
- Performing a final overall analysis to assess the conclusions reached during the audit and evaluate the overall financial statement presentation
- Planning and performing effective and efficient substantive analytical procedures
- Concluding on analytical procedures
