Document ID: chunk:federal_register_of_legislation:F2022C01189:reg:7:p20
Version: federal_register_of_legislation:F2022C01189
Segment Type: reg
Provision Reference: reg 7 (pt 20/21)
Character Range: 64224–67163

auditor may decide that it will be most appropriate to examine the entire population of items that make up a class of transactions or account balance (or a stratum within that population).  100% examination is unlikely in the case of tests of controls; however, it is more common for tests of details.  100% examination may be appropriate when, for example:

           * The population constitutes a small number of large value items;

           * There is a significant risk and other means do not provide sufficient appropriate audit evidence; or

           * The repetitive nature of a calculation or other process performed automatically by an information system makes a 100% examination cost effective.

Selecting Specific Items

A65.         The auditor may decide to select specific items from a population.  In making this decision, factors that may be relevant include the auditor's understanding of the entity, the assessed risks of material misstatement and the characteristics of the population being tested.  The judgemental selection of specific items is subject to non‑sampling risk.  Specific items selected may include:

           * High value or key items.  The auditor may decide to select specific items within a population because they are of high value, or exhibit some other characteristic, for example, items that are suspicious, unusual, particularly risk‑prone or that have a history of error.

           * All items over a certain amount.  The auditor may decide to examine items whose recorded values exceed a certain amount so as to verify a large proportion of the total amount of a class of transactions or account balance.

           * Items to obtain information.  The auditor may examine items to obtain information about matters such as the nature of the entity or the nature of transactions.

A66.         While selective examination of specific items from a class of transactions or account balance will often be an efficient means of obtaining audit evidence, it does not constitute audit sampling.  The results of audit procedures applied to items selected in this way cannot be projected to the entire population; accordingly, selective examination of specific items does not provide audit evidence concerning the remainder of the population.

Audit Sampling

A67.         Audit sampling is designed to enable conclusions to be drawn about an entire population on the basis of testing a sample drawn from it.  Audit sampling is discussed in ASA 530.[24]

Inconsistency in, or Doubts over Reliability of, Audit Evidence (Ref: Para. 11)

A68.         Obtaining audit evidence from different sources or of a different nature may indicate that an individual item of audit evidence is not reliable, such as when audit evidence obtained from one source is inconsistent with that obtained from another.  This may be the case when, for example, responses to enquiries of management, internal auditors,