L11 Notes_Part_2 - Increase in Confirmations Assurance # of...

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Sampling Overview Cost Considerations The auditor does not need conclusive evidence to be convinced and be able to render a statement of fact as to whether the financial statement are true and accurate Rather, the auditor needs sufficient evidence to be persuaded and be able to render an opinion as to whether the financial statements are fairly presented, in all material respect. History of sampling has been a movement away from verifications; however, the walkthrough in a computerized environment is close to a verification.
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Diminishing Returns to Additional Sampling Units # of Level of
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Unformatted text preview: Increase in Confirmations Assurance # of Conf. Assurance 100 80% 100 80% 200 90% 100 10% 300 95% 100 5% 400 97% 100 2% 500 98% 100 1% 1000 99.5% 500 1.5% Do these sample means have equal power? n=100/N=200 or n=50/N=100 Learning Objectives 1. Basic principles of sampling 2. Statistical v. nonstatistical sampling 3. Sampling and nonsampling risk. 4. Steps in a sampling plan. 1. Plan sample, determine sample size 2. Pull sample 3. Evaluate sample results 5. Sampling helps us answer two questions: 1. Can we rely on internal controls? (Attribute) 2. Is the account balances fairly stated? (DUS)...
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This note was uploaded on 10/05/2011 for the course ACG 5637 taught by Professor Monikacaushoulli during the Fall '08 term at University of Florida.

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L11 Notes_Part_2 - Increase in Confirmations Assurance # of...

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