Performing Effective and Efficient Audit Sampling and Analytical Procedures

Description

When performing an audit, an auditor bases their opinion about whether the financial statements are free from material misstatement on a variety of tests on the underlying account balances and classes of transactions. Some balances, such as debt or cash, may be tested 100 percent, but more commonly the auditor will use sampling to test a subset of the population to obtain sufficient evidence to support the opinion. The auditor will also use sampling when testing control activities to conclude on the effectiveness of the controls. For other account balances and transactions, auditors may choose to perform analytical procedures as substantive tests instead of, or alongside, sampling techniques. It is important to properly design and perform analytical procedures to ensure an effective and efficient audit engagement. This course will provide detailed guidance and methods for performing these analytical techniques and explore the different sampling applications used in a financial statement/compliance audit.

Highlights

  • Types of sampling and sampling risk
  • Attribute testing for tests of controls and compliance
  • Variable sampling for substantive assurance
  • Differentiating statistical and nonstatistical sampling approaches
  • Determining sample sizes in a compliance audit
  • Preliminary analytical procedures as risk assessment procedures
  • Performing final analytical procedures to assess the conclusions reached during the audit and evaluate the overall financial statement presentation
  • When to use substantive analytical procedures for efficiency and effectiveness
  • Establishing expectations for substantive analytical procedures Setting a threshold for differences
  • Following up on differences from expectations
  • Concluding on substantive analytical procedures

Objectives

  • Discuss the professional requirements related to sampling applications
  • Differentiate attribute testing for tests of controls or compliance from variable sampling for substantive testing
  • Explain special considerations related to internal control and compliance testing in a Single or Program-Specific Audit Performing effective preliminary analytical procedures in the risk assessment process Performing a final overall analysis to assess the conclusions reached during the audit and evaluate the overall financial statement presentation Planning and performing effective and efficient substantive analytical procedures Concluding on analytical procedures

Designed For

Auditors of all levels

Leaders

Sunish Mehta

Sunish is a CPA and CGMA from Southern California and New Mexico. He is the founder of Mindful-CPA Mindful-PRO and has over 25 years of experience in advisory and assurance services. His professional experience includes working with EY, PwC, and IBM Global Business Services. He has been involved in leading training courses for CPA firms both nationally and internationally since 2019 in the fields of auditing, leadership & management and mindfulness. Sunish has also taught for the UCLA Certification Program in accounting. He graduated with a B.S. in business administration from California State University, Northridge and has earned an Inner MBA from New York University.