Big Picture

Week 15-16: Unit Learning Outcomes (ULO): At the end of the unit, you are expected to:
a. Explain sampling techniques, its parameters and the efficacy of statistical sampling.
b. Describe the attributes of evidences and working papers.

Big Picture in Focus: ULOa. Explain sampling techniques, its parameters and the
efficacy of statistical sampling.

Metalanguage

The most essential terms below are operationally defined for you to have a better understanding
of this section in the course.

1. Audit sampling – refers to the use of an audit procedure in selecting sample items within an
account balance or class of transactions.
2. Statistical sampling - refers to a sampling technique used to selecting samples where the results
secured from testing the sample may be extrapolated to draw quantified conclusions about the
population.
3. Non-statistical sampling – refers to a sampling technique used to selecting samples based on a
particular purpose. In this technique, the sample is purposely biased by the auditor to take on
matters that the auditor is aware of.
4. Compliance test – refers to a test that is focused on the existence or otherwise of a particular
control.
5. Substantive test – refers to a test that is focused on quantifying the impact of internal control
failure or weakness.

Essential Knowledge

Audit sampling is the use of an audit procedure on a selection of the items within an
account balance or class of transactions. The sampling method used should yield an equal
probability that each unit in the sample could be selected. The intent behind doing so is to
evaluate some aspect of the information. Audit sampling is needed when population sizes
are large, since examining the entire population would be highly inefficient.

Sampling is used in audit because auditors do not seek absolute certainty. Instead,
a representation of the population is enough for the auditor to make conclusions, unless
total approach is required or needed. Also, there is cost-benefit reasons for using sampling.

2 Types of Sampling

1. Statistical Sampling
2. Non-statistical (Judgmental Sampling)

Statistical Sampling

The auditor has to define the population and set confidence levels. A predetermined
sample size will be provided and one may indicate how reliable and accurate the results are.

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The results secured from testing the sample may be extrapolated to draw quantified conclusions
about the population.

Advantages of Statistical Sampling

 Results may be defended against bias. Where there is a scientific method of defining
sample sizes and selecting items we can assume the more appropriate stance of being
objective, detached, dispassionate, fair, unemotional and above all, just.

 A defined sample size is provided. Close examination of statistical tables brings out
the feature of larger populations requiring only relatively small increases in sample size
to meet set parameters. Statistical methods permit smaller samples that are statistically
valid.

 One may safely extrapolate the results and apply them to the wider population.
This is a moot point in that there are many auditors who extend sample results to the
entire data field when the sample has not been obtained using statistical sampling.

 The technique is repeatable and one would expect a similar result from any
repetition. The exercise of tossing 100 coins will tend to produce around 50% heads
and 50% tails each time. With statistical sampling we would expect on average to find
similar results each time the test procedure is applied.

 It forces one to define and consider the attributes of the population. We set as a
disadvantage the need to research the data being tested from a holistic viewpoint and
this is also seen as an advantage. The more that is learnt about an area, the better will
be the auditor’s ability to direct the audit.

 Computers make statistical sampling more convenient to use. It is simple to ask the
computer to generate random numbers. Many interrogation packages have in-built
statistical tables.

 The level of confidence may be predefined Statistical sampling allows one to define
predetermined risk parameters that the final opinion may be set within. This is factual
and cannot be challenged as it states that a probable number of selections will follow a
set pattern, but not all of them. This is a comfortable position for the auditor as it allows
an authoritative opinion that in terms of logical presentation cannot be refuted, even if
the precise interpretation may be.

NON-STATISTICAL SAMPLING

Judgment sampling

The auditor uses knowledge of systems and people to select items more likely to exhibit
certain features. The sample is purposely biased by the auditor to take on board matters that
the auditor is aware of.

Haphazard sampling

This allows the selection of items at random but is not based on any defined statistical
formula. The intention is to secure an unbiased ample, although because the sample size is not

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mathematically based, it is not possible to formally extrapolate the results. The selected sample
size may be too small or too large. It is best applied to smaller populations; say less than 100
items, since statistical sampling is of no use at these levels.

SAMPLING TECHNIQUES

 Random sampling. This technique is used to select samples such that each item in the
population has an equal chance of being chosen. Random number tables may be used to
choose the required items and these may be generated by an appropriately programmed
computer.
 Stratified sampling. If we recall that the normal distribution places values in the shape of a
bell, then a skewed distribution will not appear symmetrical. This may mean that the auditor
can divide the population into several segments or strata that may consist of, say, a small
number of high value invoices for revenue contracts and a large number of small value ones
for one-off supplies. The auditor may wish to pay more attention to high value items and in
so doing can split the population into two and apply statistical sampling plans with different
confidence levels to each one.
 Cluster sampling. This is a convenient way of selecting items for testing where once the
number of transactions has been defined; they are then taken from one filing area. This may
be a single drawer of a filing cabinet and is based on simple working practicalities.
 Interval sampling. Here the population should be homogeneous, with no cyclical bias or
missing items. If we divide the population size by the sample size then the sampling interval
is obtained and every nth item is chosen for testing. One might imagine a computer being
asked to select, say, every 20th item from a particular file.
 Automated sampling. This may be seen as a selection technique where the auditor uses
sampling software to set parameters, determine the number for testing, access the relevant
file and then download the selected items into a separate spreadsheet for later analytical
testing by the auditor.

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 Error rate: This is the level of error that one may expect from the
population being tested. Error may be seen as, for example, the
4 number of invoices that are incorrect. This is normally set at 5%.
The rate is determined by the auditor and is based on pilot studies,
discussions with management and the results of previous audits.
Confidence: Confidence is the degree to which the results derived
from the sample will follow the trend in the actual population. A
95% confidence means that 95 out of every 100 items examined
 Precision: This shows the margin within which the results can be
quoted and defines the degree of accuracy that is required. It may
be in terms of the quoted error being expressed as a figure taken
from testing the sample plus or minus the degree of precision, say
2%. The real result relative to the population will be somewhere
within the lower and upper levels. If one needs to be accurate to
2% one may find an error in the sample of, say, P100, this may be
quoted for the population as between P88 and P112. The level
chosen will depend on the objective of the test and how the results
are used.
Extrapolation: This is when results taken from a sample are
grossed up and applied to the whole population. The average result
from the sample is multiplied by the value of the population to give
the estimated total error. It is practice to use 5% error rate tables,
with 95% confidence at plus or minus 2% precision. Using these
standards, most statistically extrapolated results will be accepted
by management.

Compliance vs. Substantive Testing

COMPLIANCE TEST

This tests the existence or otherwise of a particular control.

The test is of a yes/no nature where an attribute (i.e. control adherence) is either present or
does not exist. An example may be a test to determine the number of purchase invoices that
have not been authorized by a designated officer before being paid. Compliance testing is
concerned with specific attributes so that a frequency may be quoted.

Attribute sampling. One needs to set an error rate, confidence levels and precision limits. This
may be a 5% error at 95% confidence plus or minus 2%. The error rate determines which
statistical sampling table is used and this table will give the required sample size at a glance.

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When one determines the actual error rate then the precision is recalculated for errors over the
set rate. Additional error rate tables are used with the new error rate for the revised precision
levels.

Stop-go sampling. This is an incremental sampling plan that starts with smaller samples to
save time once one sets an acceptable probability level. The plan assumes that all populations
over 2,000 are the same. The sample will give a maximum acceptable error rate of, say, 5% and
if the actual results are higher, then further samples are taken until the results are acceptable
and within the set limit.

Discovery sampling. Discovery sampling is based on the notion of determining how many
items must be examined if one has a fair chance of discovering a suspected fraud. The plan
gives the sample size required to find the error and is useful for planning purposes, although no
conclusions may be drawn about the population itself. As with all sampling plans one must set a
probability within which fall the chances of discovering the fraud with the sample size that the
table provides.

SUBSTANTIVE TEST

These tests are carried out to establish the extent to which the implications of a control
weakness may be quantified.
We may be concerned to discover the total value of purchase invoices incorrectly posted to the
wrong year due to poor cut-off procedures. Substantive testing looks for variables and enables
the auditor to quote a range of values from the test results.

Variable sampling. This plan enables one to take the average result from the sample and
extrapolate this to arrive at an estimated error rate that applies to the entire population. A
preliminary sample of 50 items is taken and the error rate calculated along with the SD from the
sample. The error rate divided by the SD gives a proportion that can be used to determine
sample sizes from the table for various confidence levels. For additional items the SD is
recalculated.

Difference estimates. Where the book value (BV) is available one may take the difference
between the BV and actuals for a preliminary sample of 100 items. The resulting SD is used to
calculate the new sampling error rate that may be compared to the original. This technique
provides a short-cut and can be very convenient. If there are many missing items then the
differences may actually be bigger than the BV.

Monetary unit sampling (MUS). This plan is used by external auditors and incorporates an
assessment of the strength of the particular internal control system. The poorer the internal
controls the greater the degree of reliability required which in turn makes the sample size larger.

Source:

Tan, J. (2015). Internal Audit: Concepts, Theories and Applications. 1st Edition

Self-Help: You can also refer to the sources below to help you further
understand the lesson:

6
*Audit Sampling. https://www.accountingtools.com/articles/audit-sampling.html

*Audit Sampling. https://corporatefinanceinstitute.com/resources/knowledge/accounting/audit-

sampling/

*Georgiades, G., C.P.A. (2018). A refresher on audit sampling - AU-C section 530, audit
sampling. Miller GAAS Update Service, 18(16), 1-7. Retrieved from
https://search.proquest.com/docview/2098971220?accountid=31259

*Jackson, G. T. (2016). The auditor's sampling decision in the presence of redundant internal
controls. Journal of Accounting and Finance, 16(3), 88-95. Retrieved from
https://search.proquest.com/docview/1807473354?accountid=31259

* Tan, J. (2015). Internal Audit: Concepts, Theories and Applications. 1st Edition

*Teodorescu, S., & Dumitru, A. P. (2019). PRACTICAL METHODS OF SELECTION AND

CALCULATION OF SAMPLE SIZE FOR AUDIT SAMPLING. Challenges of the Knowledge
Society, , 1129-1133. Retrieved from https://search.proquest.com/docview/2263227242?
accountid=31259

Let’s Check
Activity 1. Multiple Choice. Choose the correct answer from the given choices.

1. Which one of the following statements about sampling is true?

a. For very large populations, the absolute size of the sample has more impact on the
precision of its results than does its size relative to its population
b. For a given sample size, a simple random sample always produces the most representative
sample
c. A larger sample is always more representative of the underlying population than a smaller
sample
d. The limitations of an incomplete sample frame can almost always be overcome by careful
sampling techniques

2. Which of the following changes to a sampling plan would result in a narrower confidence
interval?
a An increase in the precision
b An increase in the confidence level from 95 to 99 percent
c A decrease in the allowable risk of incorrect acceptance
d A decrease in the confidence level from 95 to 90 percent

3. The degree to which the auditor is justified in believing that the estimate based on a random
sample will fall within a specified range is called
a Precision
b Non-sampling risk
c Confidence level
d Sampling risk

4. In which of the following situations would monetary-unit sampling be more effective and
efficient than ratio estimation?
a The population has a high degree of variability in peso amount

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b The population contains a large number of differences between the recorded amount and
the actual amount
c The population is expected to contain few differences between the recorded amount and the
actual amount
d The population has a low degree of variability in dollar amount

5. A test of 200 invoices randomly selected by the internal auditor revealed that 40 had not
been approved for payment. At the 95% confidence level and tolerable error rate of 20%,
the auditor may conclude that
a The internal controls employed are effective
b The internal controls employed are ineffective
c The internal controls employed are dependent upon the nature of transactions
d The internal controls employed are overruled by the management

6. Identification of an appropriate population to sample is dependent upon audit objectives. A

population of entries in an asset repairs expense file would be an appropriate population if
the audit objective is to determine whether
a Expenditures for fixed assets have been improperly expensed.
b Non-capital repair expenditures have been recorded in the proper period
c Non-capital repair expenditures have been properly charged to expense
d Expenditures for fixed assets have been recorded in the proper period

7. When an internal auditor’s sampling objective is to obtain a measurable assurance that a

sample will contain at least one occurrence of a specific critical exception existing in a
population, the sampling approach to use is
a Variables
b Random
c Probability proportional to size
d Discovery

8. When an auditor attempts to understand the operation of the accounting system by tracing a
few transactions through the accounting system, the auditor is said to be
a. Testing controls
b. Vouching
c. Tracing
d. Performing walkthrough

9. The likelihood of assessing control risk too high is the risk that the sample selected to test
controls
a. Does not support the auditor’s planned assessed level of control risk when the true
operating effectiveness of the control justifies such an assessment.
b. Contains misstatements that could be material to the financial statements when aggregated
with misstatements in other account balances or transactions classes.
c. Contains proportionately fewer deviations from prescribed controls than exist in the balance
or class as a whole.
d. Does not support the tolerable misstatement for some or all of management’s assertions.

10. Which of the following statements concerning projection of errors found in the sample to the
population is incorrect?

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a. For tests of details, the auditor should project monetary errors found in the sample to the
population, and should consider the effect of the projected error on the audit objective and
on other areas of the audit.
b. Anomalous errors found in the sample should be included in the projection of errors to the
population.
c. For tests of controls, no explicit projection of errors is necessary since the sample deviation
rate is also the projected deviation rate for the population as a whole.
d. If a class of transactions or an account balance has been divided into strata, the error is
projected for each stratum separately.

11. An advantage of statistical sampling over non-statistical sampling is that statistical sampling
helps an auditor to
a. Eliminate the risk of non-sampling errors.
b. Reduce the level of audit risk and materiality to a relatively low amount.
c. Measure the sufficiency of the evidential matter obtained.
d. Minimize the failure to detect errors and irregularities.

12. To determine the sample size for a test of controls, an auditor should consider the tolerable
deviation rate, the allowable risk of assessing control risk too low, and the
a. Expected deviation rate.
b. Upper precision limit.
c. Risk of incorrect acceptance.
d. Risk of incorrect rejection.

13. When an auditor has chosen a random sample and is using non-statistical attributes
sampling, that auditor
a. Has committed a non-sampling error.
b. Need not consider the risk of assessing control risk too low.
c. Will have to use discovery sampling to evaluate the results.
d. Should compare the deviation rate of the sample to the tolerable deviation rate.

14. A number of factors influences the sample size for a substantive test of details of an account
balance. All other factors being equal, which of the following would lead to a larger sample
size?
a. Greater reliance on internal control.
b. Smaller expected frequency of errors.
c. Greater reliance on analytical procedures.
d. Smaller measure of tolerable misstatement.

15. Random numbers can be used to select a sample only when each item in the population:
a. Can be assigned to a specific stratum.
b. Is independent of outside influence.
c. Can be identified with a unique number.
d. Is expected to be within plus or minus three standard deviations of the population mean.

16. The tolerable occurrence rate for a control test is generally

a. Lower than the expected occurrence rate in the related accounting records.
b. Higher than the expected occurrence rate in the related accounting records.
c. Identical to the expected occurrence rate in the related accounting records.
d. Unrelated to the expected occurrence rate in the related accounting records.

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17. In examining cash disbursements, an auditor plans to choose a sample using systematic
selection with a random start. The primary advantage of such a systematic selection is that
population items
a. Which include errors will not be overlooked when the auditor exercises compatible reciprocal
options.
b. May occur in a systematic pattern, thus making the sample more representative.
c. May occur more than once in a sample.
d. Do not have to be prenumbered in order for the auditor to use the technique.

18. Attribute sampling, as applied to control testing, can assist the auditor in several ways.
Which of the following tasks is not enhanced by sampling?
a. Determining the number of documents to examine in testing for a specific attribute.
b. Selecting the documents to be tested.
c. Examining the documents.
d. Evaluating the sample results.

19. Which of the following statements concerning sample size is true?

a. An increase in the tolerable occurrence rate, other factors remaining unchanged, increases
sample size.
b. The higher the expected occurrence rate, other factors remaining unchanged, the larger will
be the sample size.
c. The more critical the attribute being tested, the higher will be the tolerable occurrence rate
set by the auditor, and the larger will be the sample size.
d. The lower the acceptable risk of underassessment of control risk, the smaller will be the
sample size.

20. Sample size

a. Increases with the use of higher confidence levels.
b. Decreases with the use of higher confidence levels.
c. Remains unchanged with changes in confidence levels.
d. Increases with the use of lower confidence levels.

Let’s Analyze
Activity 1. Audit sampling is a technique used by the auditor is conducting an audit. Now that
you have understood the different types of sampling and sampling techniques, I will require you
to explain thoroughly your answers in the questions given below.

1. How relevant is audit sampling in auditing?

_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________

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_____________________________________________________________________
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_____________________________________________________________________

2. Differentiate statistical and non-statistical sampling.

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_____________________________________________________________________

3. Between statistical and non-statistical sampling, which is required and more applicable in

auditing?

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_____________________________________________________________________
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In a Nutshell

Activity 1. Based from the discussions of audit planning, please feel free to write your
arguments or lessons learned below. I have indicated my arguments or lessons learned.

1. Audit sampling is a technique that is commonly used by external auditors. It enables

auditors to conduct audit in a more effective manner. Thus, auditors need to be
equipped with the appropriate knowledge in using sampling in audit. After all, it does not
require the auditor to be proficient in all aspects of statistical sampling because non-
statistical sampling can be easily applied.

Your Turn

2. ______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
3. ______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
4. ______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
5. ______________________________________________________________________
______________________________________________________________________
______________________________________________________________________

Q&A LIST.

This section allows you to list down all emerging questions or issues. These questions or issues
may be raised in the LMS or other modes. Please write the answers after clarification. The Q&A
portion helps in the review of concepts and essential knowledge.

     
  Do you have any question for clarification?  
   

  Questions/Issues Answers  

  1.    

  2.    

  3.    

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  4.    

  5.    
       

KEYWORDS INDEX.

This section lists down the keywords that help you for recall. This also includes concepts (a
word or phrase), ideas, theories, names of people, and other vital terms to remember.

Attribute sampling Error rate Random sampling

Audit sampling Extrapolation Statistical sampling
Automated sampling Haphazard sampling Stop-go sampling
Cluster sampling Interval sampling Stratified sampling
Compliance testing Judgmental sampling Substantive testing
Monetary unit sampling
Confidence (MUS) Variable sampling
Difference estimates Non-statistical sampling  
Discovery sampling Precision  

Big Picture in Focus: ULOb. Describe the attributes of evidences and working
papers.

Metalanguage

The most essential terms below are operationally defined for you to have a better understanding
of this section in the course.

1. Working paper – refers to a document that contains all information gathered during an audit. It
provides appropriate and adequate evidence obtained by an auditor to support his or her
opinion regarding the underlying audit subjects.
2. Relevant - refers to the quality of evidence that enables it to make changes in the judgment or
decisions at hand. Talks about appropriateness.
3. Sufficient – refers to the quality of evidence that enables it to make sound judgment or
decisions because of adequate numbers. Talks about adequacy.
4. Reliable – refers to the quality of evidence that enables it to provide objective and fair
assessment and opinion about the audit subject. Talks about objectivity.
5. Practical – refers to the quality of evidence that ensures the cost-benefit criterion of getting
such evidence. Talks about efficiency.

Essential Knowledge

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ATTRIBUTES OF AUDIT EVIDENCE
 Relevant
 Sufficient
 Reliable
 Practical

WORKING PAPERS

Audit working papers are used to document the information gathered during an
audit. They provide evidence that sufficient information was obtained by an auditor to
support his or her opinion regarding the underlying financial statements. Working papers
also provide evidence that an audit was properly planned and supervised. They should
contain sufficient information for an auditor who did not work on an audit to discern the
reasons for the opinion given regarding a client's financial statements.

FUNCTIONS OF WORKING PAPERS

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TYPES OF WORKING PAPERS

Types of Working Papers

 Audit programme
 Financial reports (IS/BS/CF)
 Account analyses
 Account schedules/summaries
 Adjusting/reclassification entries
 Memos, contracts, budgets, board resolutions, management reports
 Correspondences with third-parties
 Minutes of management’s meeting
 Confirmation replies

Source:

Tan, J. (2015). Internal Audit: Concepts, Theories and Applications. 1st Edition

Self-Help: You can also refer to the sources below to help you further
understand the lesson:

*Georgiades, G., C.P.A. (2016). A refresher on audit evidence: AU-C section 500, audit
evidence. Miller GAAS Update Service, 16(14), 1-10. Retrieved from
https://search.proquest.com/docview/1807233027?accountid=31259

* Tan, J. (2015). Internal Audit: Concepts, Theories and Applications. 1st Edition

Let’s Check
Activity 1. Multiple Choice. Choose the correct answer from the given choices.

1. Which of the following audit procedures would provide the least reliable evidence that the
client has legal title to inventories?

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a. Examination of paid vendors’ invoices.
b. Observation of physical inventory counts.
c. Confirmation of inventories at locations outside the client facilities.
d. Analytical review of inventory balances compared to purchase and sales activities.

2. An audit evidence is generally considered relevant when it is

a. Objective and unbiased.
b. Factual, adequate and convincing.
c. Consistent with the audit objectives.
d. Derived through valid statistical sampling.

3. Which of the following is a management assertion regarding account balances at the period
end?
a. Transactions and events that have been recorded have occurred and pertain to the entity.
b. Transactions and events have been recorded in the proper accounts.
c. The entity holds or controls the rights to assets, and liabilities are obligations of the entity.
d. Amounts and other data related to transactions and events have been recorded.

4. Which of the following tests of controls would most likely be performed by an auditor to
obtain evidence about management’s assertion concerning the completeness of sales
transactions?
a. Inquiries about the entity’s credit granting policies and whether credit checks are
consistently applied.
b. Inspect the entity’s reports of prenumbered shipping documents that have not been
recorded in the sales journal.
c. Compare prices on prenumbered sales invoices to the entity’s authorized price list.
d. Verify that extensions and footings on sales invoices and monthly statements of customers’
accounts have been checked.

5. All of the following are examples of substantive test to verify the valuation of net accounts
receivable except the
a. Recomputation of the allowance for bad debts.
b. Inspection of accounts for current versus noncurrent status in the statement of financial
position.
c. Inspection of the accounts receivable aging schedule.
d. Comparison of the allowance for bad debts with past periods.

6. The most reliable form of documentary evidence are those documents that are
a. Prenumbered.
b. Internally generated.
c. Issued subsequently.
d. Authorized by a responsible official.

7. Which statements is incorrect concerning audit evidence?

a. The greater the risk, the more audit evidence is likely to be required.
b. The higher the quality, the more may be required.
c. Merely obtaining more audit evidence may not compensate for its poor quality.

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d. Obtaining audit evidence relating to a particular assertion is not a substitute to obtaining
audit evidence regarding another assertion.

8. The auditor looks for an indication on duplicate sales invoices to see if the invoices have
been verified. This is an example of
a. A test of details of balances.
b. A test of control.
c. A substantive test of transactions.
d. Both a test of control and a substantive test of transactions.

9. Which of the following types of documentary evidence should the auditor consider to be the
most reliable?
a. A sales invoice issued by the client and supported by a delivery receipt from an outside
trucker.
b. Confirmation of an accounts payable balance mailed by and returned directly to the auditor.
c. A check issued by the company bearing the payee’s endorsement which is included with the
bank statement mailed directly to the auditor.
d. A working paper prepared by the client’s controller and reviewed by the client’s treasurer.

10. The auditor obtains corroborating evidential matter for accounts receivable by using positive
or negative confirmation requests. Under which of the following circumstances might the
negative form of the accounts receivable confirmation be useful?
a. A substantial number of accounts are in dispute.
b. Internal control over accounts receivable is ineffective.
c. Client records include a large number of relatively small balances.
d. The auditor believes that recipients of the requests are unlikely to give them consideration.

Let’s Analyze
Activity 1. Audit evidence is important in conducting an audit. Now that you have understood
the different types of sampling and sampling techniques, I will require you to explain thoroughly
your answers in the questions given below.

1. Describe the importance of gathering evidences in auditing.

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

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 _________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_______________________________________________________

2. Explain how audit evidences are gathered?

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

__________________________________________________________________

3. What are the criteria considered by the auditor in gathering audit evidences?

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

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 _________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

____________________________________________________________________

In a Nutshell

Activity 1. Based from the discussions of audit evidences, please feel free to write your
arguments or lessons learned below. I have indicated my arguments or lessons learned.

1. Audit evidences come in many forms. An auditor must be knowledgeable in determining

if an evidence is appropriate for an assertion. In gathering these evidences, the auditor
is not required to gather all evidences. This is where sampling comes in. Through the
use of sampling, only a considerable number of evidences are required to address an
assertion.

Your Turn

2. ______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
3. ______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
4. ______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
5. ______________________________________________________________________
______________________________________________________________________
______________________________________________________________________

Q&A LIST.

19
This section allows you to list down all emerging questions or issues. These questions or issues
may be raised in the LMS or other modes. Please write the answers after clarification. The Q&A
portion helps in the review of concepts and essential knowledge.

     
  Do you have any question for clarification?  
   

  Questions/Issues Answers  

  1.    

  2.    

  3.    

  4.    

  5.    
       

KEYWORDS INDEX.

This section lists down the keywords that help you for recall. This section includes concepts (a
word or phrase), ideas, theories, names of people, and other vital terms to remember.

Account analyses Budget resolutions Memos

Minutes of management
Account schedules/summaries Contracts meetings
Adjusting/reclassification
entries Confirmation slips Practical
Attributes Correspondences Relevant
Audit program Financial reports Reliable
Audit working papers Management reports Sufficient

COURSE SCHEDULE

This section calendars the activities of the course and where to submit the said activities.

ACTIVITY DATE WHERE TO SUBMIT

Big Picture in Focus ULOa November 23-27, 2020  
Let's Check November 25, 2020  BB

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Let's Analyze November 25, 2020  BB
In a Nutshell November 27, 2020  BB
Q&A List November 27, 2020  BB
Big Picture in Focus ULOb Nov. 30 - Dec. 3, 2020  
Let's Check December 1, 2020  BB
Let's Analyze December 1, 2020  BB
In a Nutshell December 3, 2020  BB
Q&A List December 3, 2020  BB
7th Formative Assessment December 4, 2020  BB

ONLINE CODE OF CONDUCT

1. Students are expected to abide by and honor a code of conduct, and thus, everyone and
all are exhorted to exercise self-management and self-regulation.
2. All students are guided by professional conduct as learners in attending On-Line
Blended Delivery (OBD) course. Any breach and violation shall be dealt with properly
under existing guidelines, specifically in Section 7 (Student Discipline) in the Student
Handbook.
3. Professional conduct refers to the embodiment and exercise of the university Core
values, specifically in the adherence to intellectual honesty and integrity; academic
excellence by giving due diligence in virtual class participation in all lectures and
activities, as well as fidelity in doing and submitting performance tasks and assignments;
personal discipline in complying with all deadlines; and observance of data privacy.
4. Plagiarism is a serious intellectual crime and shall be dealt with accordingly. The
University shall institute monitoring mechanisms online to detect and penalize
plagiarism.
5. Students shall independently and honestly take examinations and do assignments,
unless collaboration is clearly required or permitted. Students shall not resort to
dishonesty to improve the result of their assessments (eg. Examinations, assignments).
6. Students shall not allow anyone else to access their personal LMS account. Students
shall not post or share their answers, assignment or examinations to others to further
academic fraudulence online.
7. By enrolling in OBD course, students agree and abide by all the provisions of the Online
Code of Conduct, as well as all the requirements and protocols in handling online
courses.

Prepared by:

Joel B. Tan
Course Coordinator

Reviewed by:

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Devzon U. Porras
Program Head – BSAT

Approved by:

Lord Eddie I. Aguilar

Dean

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