Stratification
An auditor may stratify a population if the auditor considers that
the population is made up of two or more sub-populations (or
strata), where the
risk of a
significant exception (approximated by control risk in control
testing and the risk of a material misstatement in substantive
testing) is different in each sub-population (or stratum). The
purpose of stratification is to improve the effectiveness of the
audit through specific consideration of the fact that different
data items in the population are associated with different risks of
significant exceptions. Stratification (or more accurately,
stratification based on differing risks of a significant exception)
may also improve the efficiency of the audit through a reduction in
the sample size.
Each stratum is considered to be a separate population. Thus,
the auditor needs to determine a
testing plan for each stratum
and, importantly, draws a separate conclusion about the actual
level of exceptions in each stratum.
Audit testing procedures, index
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