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Unformatted text preview: dditionally, auditors must assess the control environment at entities with multiple
locations. If controls at the different locations are significantly different, each location
must be considered a separate population.
The auditor must document the “sampling unit,” which is the individual item subject to
sampling in the population (i.e., reconciliations. loan files, cash disbursements. cash
When selecting the sample of individual items, auditors must ensure that the sample is
representative of the universe for the compliance requirement being tested.
The auditor should also clearly define what would be considered an exception. A single
exception would indicate noncompliance, subject to further determination of materiality
necessary to determine the required method of reporting. A. Determining the Sample Size.
To determine attribute testing sample sizes, the auditor needs to determine the value
for three inputs: desired confidence level, tolerable exception rate, and expected
exception rate. The compliance table sample size is based on the following
expectations. 3/2011 Page 1 2000.04 REV-2 CHG-10 1. Desired Confidence. Auditors should obtain a high degree of assurance
by using a confidence level of 90. 95. or 99 percent.
2. Tolerable Exception Rate. A 5-10 percent exception rate is acceptable.
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- Fall '08