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Unformatted text preview: Chapter 17 Audit Sampling for Tests of Details of Balances The approach to covering audit sampling for tests of details of balances in Chapter 17 is similar to the approach for audit sampling for tests of controls and substantive tests of transactions in Chapter 15. Nonstatistical sampling is covered early in the chapter, followed by discussions of monetary unit sampling and variables sampling (statistical sampling methods). We believe that the format of Chapter 17 will provide you with maximum flexibility in deciding how you wish to approach the topic of audit sampling for tests of details of balances. The chapter is built around the fourteen steps of audit sampling, which were first introduced in Chapter 15. All fourteen steps apply to both nonstatistical and statistical sampling. Each step is covered in detail during the discussion of nonstatistical sampling on pages 567-575. The discussions of monetary unit sampling (pages 576-586) and variables sampling (pages 586-592) use these same fourteen steps, but focus on the differences between how the steps are applied under these statistical methods compared to nonstatistical sampling. Before assigning Chapter 17, you must decide how you want to approach the topic of audit sampling for tests of details of balances. There are four possible approaches for covering Chapter 17: (1) Cover nonstatistical sampling only (2) Cover nonstatistical sampling, followed by monetary unit sampling (3) Cover nonstatistical sampling, followed by variables sampling (4) Cover nonstatistical sampling, followed by both monetary unit sampling and variables sampling (this approach is not recommended unless you have extra time in your course schedule) Note that it is not feasible to cover either monetary unit sampling (MUS) or variables sampling without first covering nonstatistical sampling. This is because the MUS and variables sampling portions of the chapter revolve around the fourteen steps outlined during the nonstatistical sampling discussion. The following are the primary topical areas that we suggest you cover: Chapter opening vignette Comparisons of audit sampling for tests of details of balances and for tests of controls and substantive tests of transactions Nonstatistical sampling Monetary unit sampling [ ignore this section if using approach (1) or (3) discussed earlier ] Variables sampling [ ignore this section if using approach (1) or (2) discussed earlier ] 17-1 Instructor Note: Statistical sampling is a highly complex subject to which justice cannot always be done in an introductory auditing course. There is certainly strong justification for skipping the topic entirely in the introductory course. We recommend this be done when an advanced auditing course is included in the auditing curriculum....
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- Spring '10