Module_F - Module F Attributes Sampling MODULE F Attributes...

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Module F - Attributes Sampling MODULE F Attributes Sampling LEARNING OBJECTIVES Review Checkpoints Exercises, Problems, and Simulations 1. Identify the objectives of attributes sampling, define deviation conditions, and define the population for an attributes sampling application. 1, 2, 3, 4 51, 53, 54, 55, 71 (partial), 73 (parts a – b), 74 (parts a – b), 75 (part a), 76 (partial), 77 (partial), 79 2. Understand how various factors influence the size of an attributes sample. 5, 6, 7 52 (partial), 71 (partial), 72 (parts a – b), 75 (parts b – c), 76 (partial), 77 (partial), 78, 79 3. Determine the sample size for an attributes sampling application. 8, 9 52 (partial), 60, 61, 62, 63, 64, 71 (partial), 72 (part c), 74 (part c), 75 (parts d – e), 80 (partial) 4. Identify various methods of selecting an attributes sample. 10, 11, 12 56 (partial), 57, 58, 59, 71 (partial), 73 (parts c-d), 74 (part d) 5. Evaluate the results of an attributes sampling application by determining the upper limit rate of deviation (ULRD). 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 52 (partial), 56 (partial), 65, 66, 67, 68, 69, 70, 71 (partial), 72 (parts d – f), 73 (part d), 74 (parts e – g), 75 (parts f – h), 77 (parts g-h), 80 (partial) 6. Define sequential sampling and discovery sampling and identify when these types of sampling applications would be used. 23, 24 7. Understand how to apply nonstatistical sampling to attributes testing. 24, 25 74 MODF-1
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Module F - Attributes Sampling SOLUTIONS FOR REVIEW CHECKPOINTS F.1 Attributes sampling is a method of sampling used to determine the extent to which some characteristic (or attribute) exists within a population of interest. Attributes sampling is used by the auditor in performing tests of controls to determine the operating effectiveness of internal control policies and procedures. F.2 The auditor’s objective in attributes sampling is to determine the operating effectiveness of key controls that influence the financial statement assertions of interest. As a result, the financial statement assertions ultimately determine which control(s) are tested and are the subject of the auditor’s attributes sampling application. F.3 Deviation conditions represent situations in which key controls are not functioning as intended. Deviation conditions are important in an attributes sampling application because they provide the auditor with evidence regarding the operating effectiveness of the client’s internal control. F.4 An appropriate definition of the population is important because auditor conclusions can only be extended to the population from which the sample is selected. F.5 a. Sampling risk is the risk that the decision made by the auditor based on the sample is different from the decision that would have been made if the entire population were examined. b. The tolerable rate of deviation is the maximum rate of deviations permissible by the auditor without modifying the planned level of control risk.
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