CONTENTS

PREFACE

AUTHORITY STATEMENT

Paragraphs

Application.................................. 1-2

Operative Date................................ 3

Introduction.................................. 4-5

Definitions.................................. 6-15

Audit Evidence............................... 16

Risk Assessment Procedures....................... 17

Tests of Controls............................... 18-20

Substantive Procedures.......................... 21

Risk Considerations in Obtaining Audit Evidence......... 22-23

Audit Procedures for Obtaining Audit Evidence.......... 24

Selecting Item for Testing to Gather Audit Evidence....... 25-27

Selecting All Items............................. 28

Selecting Specific Items.......................... 29-30

Audit Sampling................................ 31

Statistical versus Non-Statistical Sampling Approaches..... 32-34

Design of the Sample............................ 35-38

Population.................................. 39-40

Stratification................................. 41-43

Value Weighted Selection......................... 44

Sample Size.................................. 45-47

Selecting the Sample............................ 48-50

Performing the Audit Procedure..................... 51-53

Nature and Cause of Errors........................ 54-57

Projecting Errors.............................. 58-61

Evaluating the Sample Results...................... 62-65

Conformity with International Standards on Auditing...... 66

Appendix 1: Examples of Factors Influencing Sample Size for Tests of Controls

Appendix 2: Examples of Factors Influencing Sample Size for Tests of Details

Appendix 3: Sample Selection Methods