CPA Auditing and Attestation (AUD)

Certified Public Accountant Auditing and Attestation examination.

Audit FundamentalsAudit Planning and Risk AssessmentInternal Controls
Audit Evidence and SamplingProfessional Ethics and IndependenceAudit Reports and Opinions
Auditing in Small BusinessesTechnology in AuditingFraud Detection and Prevention
Effective Multiple-Choice StrategiesTime Management on Exam DayMastering Simulations
Audit FundamentalsAudit Planning and R...Internal ControlsAudit Evidence and S...Professional Ethics ...Audit Reports and Op...Auditing in Small Bu...Technology in Auditi...Fraud Detection and ...Effective Multiple-C...Time Management on E...Mastering Simulation...
Advanced Topics

Audit Evidence and Sampling

Gathering Audit Evidence

Auditors collect evidence to support their opinions. Evidence can be physical (inventory), documentary (invoices), or analytical (ratios).

Types of Evidence

  • Physical Inspection: Counting cash or inventory.
  • Confirmation: Getting third-party verification.
  • Observation: Watching processes in action.
  • Recalculation: Checking math accuracy.

Audit Sampling

Since reviewing every transaction is impractical, auditors use sampling – selecting a subset to draw conclusions about the whole.

Sampling Methods

  • Statistical Sampling: Uses math to determine sample size and selection.
  • Non-statistical Sampling: Relies on auditor judgment.

Balancing Evidence

Auditors weigh the reliability and sufficiency of evidence. Reliable evidence from independent sources is most valuable.

Examples

  • An auditor confirms a bank balance by contacting the bank directly.

  • A random sample of invoices is checked for proper approval.

In a Nutshell

Audit evidence and sampling help auditors form opinions without examining every transaction.

Key Terms

Sampling
Selecting a portion of items for testing to draw conclusions about the whole.
Confirmation
Direct communication with third parties to verify information.
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Professional Ethics and Independence