Sample sizes are often set by the in-charge accountant or the engagement manager. For many years, training programs did not emphasize sampling, and "auditor judgment" was used to set sample sizes. In recent years, additional attention has been paid to the extent of evidence gathered to support the "low audit risk" audit opinion, and the extent of sampling has thus received additional attention in inspections and peer reviews. Increased attention on the design and implementation of internal controls over financial reporting has also led to improvements in many engagement controls and created more opportunities for engagements to utilize reliance on controls as a more efficient approach for at least a part of the audit strategy. As a result, there can exist a void in the understanding of many experienced professionals in how to determine sample sizes that are demonstrably sufficient to the audit planning needs.
This CPE course will focus on determining a defensible sample size for tests of internal controls and for substantive tests of detail. We will concentrate on the principles of substantive tests of detail and illustrate the application of monetary unit sampling concepts, or MUS, the most commonly used sampling technique currently in practice.
Delivery Method: Self Study
CPE Credit: Auditing
Program Level: Intermediate