Audit testing
Audit testing procedures refer to both (i) audit sampling and (ii)
selective examination procedures.
Audit sampling refers to the examination of less than 100% of the
units comprising a population where
(i) each unit has a chance of being selected, and (ii) the
objective is to draw a conclusion about the characteristics of the
population. Audit sampling may be performed using either
statistical or non-statistical techniques. Statistical techniques,
which are not dealt with in these pages, additionally require (i) the units in
the population to have the same chance of being selected (ii) the
items for examination to be selected randomly and (iii) the
conclusion to be drawn using tables or formulas based on
probability theory.
Selective examination refers to the identification and selection by
the auditor (for subsequent examination) of certain items, usually
key items, from a particular
population. For example, in the audit of an account balance, the
auditor may decide to select (for subsequent vouching) all items
making up the account balance greater than $x ; or, in the audit of
a receivables account balance, an auditor may decide to select (for
subsequent positive confirmation) all customers with account
balances older than y months. The selection of these items is not
audit sampling but is referred to as selective examination.
Selective examination is a form of audit testing, but not a form of
audit sampling as, for example, a conclusion cannot be drawn, based
on the items selected, about the population as a whole.
Note that where an auditor vouches every item in a population
(as is often the case with small populations in which knowledge of
the existence of exceptions is critical to the auditor's opinion
about the population), it is referred to as a 100% examination.
This is not a form of audit testing.
Audit testing procedures, index
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