How to use the Agile Sampling worksheet?

How to use the Agile Sampling worksheet?

How to use the Agile Sampling worksheet?

Agile Audit Forms - Sampling Worksheet

The Agile Audit Forms - Sampling Worksheet (AAF - SW) is designed to assist the auditor to generate sample sizes for substantive audit procedures.  The model and its associated calculations are provided for guidance purposes only. A significant amount of professional judgment must be exercised by users. Users are reminded that according to ASA 530 'Audit Sampling', the auditor shall determine appropriate means for selecting items for testing so as to gather sufficient appropriate audit evidence to meet the objectives of the audit procedures.





Inserting an Agile Audit Forms - Sampling Worksheet (AAF - SW)
The AAF - SW can be inserted multiple times (as required) to any area of the Document screen. 
1. Locate the folder in which you wish to add the AAF - SW and press the “+” Create a document button.

2. Under Agile Audit Forms, select Sampling Worksheet
.
3. Enter the identifier.
4. Press Save to finalise the new workpaper.

Using Agile Audit Forms - Sampling Worksheet (AAF-SW)

 

Guidance

The guidance section of the workpaper includes a link to the CaseWare Sampling Methodology paper for you to understand the model and its associated calculations. 

 

Settings

The settings section is where you can determine the type of sample you are wanting to perform:

  • Monetary units

  • Number of items

 

Class of transaction or account balance

The class of transaction or account balance section is where we determine the Financial Statement Area we wish to use for this sample calculation. The items in this list will match the 2-250 Risk Assessment Report workpaper. This list cannot be modified and has no direct link to 2-250.

 

Sample Selection

The Sample Selection area determines whether or not we are doing Statistical or Judgemental (nonstatistical) sampling. 

  • Statistical allows each sampling unit to stand an equal chance of selection. This option will display the sampling table (i.e. the Statistical (Monetary units) area)  to determine your Required Level of Assurance, your inherent risk and your control risk assessment.

Judgemental removes the probability concept and is dependent on the auditor’s professional judgment. This option will hide the sampling table and replace it with the Non-Statistical (judgemental) area.



The Sample Selection area also allows you to document on the following items (if applicable:

  • Purpose of test to be performed

  • Specific matters to consider in designing test

  • Describe the procedures to be performed

  • What would constitute a misstatement in the sample


Statistical (Monetary units)

  • Total Population: This is the total value of the class of transaction or account balance being tested.

  • Adjustment: This is the amount being excluded from the Total Population to calculate the value of the population that remains untested.

  • Population: This is the value of the population that remains untested which was calculated by subtracting Adjustments from the Total Population above. Items that were excluded may include:

    • the value of items substantiated by other audit procedures;

    •  items specifically tested above a certain monetary value;

    • items not to be tested, for example, if there is an insignificant risk of material misstatement for those items.

  • Tolerable Misstatement: This is the maximum amount of misstatement that can be accepted in the population to be tested without causing the financial statements to be materially misstated. Effectively, this amount is the level of materiality for the population being tested. Consider whether sampling is an appropriate testing method for the population.

  1. Tolerable misstatement should less than 10% of the Population. An error may appear if this is not the case.

  1. Tolerable misstatement should be the same amount or an amount lower than performance materiality. An error may appear if this is not the case.


  1. Expected Misstatement: This is the monetary amount of misstatement expected in the population. If the Expected Misstatement amount is close to the Tolerable Misstatement amount, you should reconsider the use of sampling. For the purposes of this calculation, the percentage of Expected Misstatements is documented in the 'Expected misstatement capped' field. This has been set to 50% by default. An error may appear if the expected misstatement exceeds this cap.



Sampling table


Important: Users are reminded that the expected misstatement factors in this model must be developed using their own professional judgement and the default levels and associated risk factors may not be appropriate.


  • Required Level of Assurance: The Required Level of Assurance reflects the level of confidence required. It can be equated to 100% less the Audit Risk (AR) associated with the assertion, i.e. 100% - 10% (AR) = 90%.

  • Inherent Risk: Based upon the ‘Reliability Factor Table’, these inherent and control risks factors represent the quantitative level of risk from the risk assessment. The higher the level of inherent or control risk (H) then the lower the risk factor deducted for sampling purposes.

  • Control Risk: Based upon the ‘Reliability Factor Table’, these inherent and control risks factors represent the quantitative level of risk from the risk assessment. The higher the level of inherent or control risk (H) then the lower the risk factor deducted for sampling purposes.

  • Other Substantive Tests: The reliance that can be placed upon other substantive tests such as analytical procedures performed on the specific population being tested. Other Substantive Tests (OST) will provide varying levels of assurance, as a result different levels have been developed for the calculation.

Expected Misstatement Factor: Represents (using risk factors) the Expected Misstatement in the population in relation to the Tolerable Misstatement. Effectively the Residual Detection Risk Factor will be increased to accommodate for expected misstatements in the population. The risk factors for Expected Misstatement used in this model are based upon statistical tables modified for the purposes of rounding and are restricted in range to accommodate best practice.




Non-Statistical (judgemental)

  • Total Population: This is the total value of the class of transaction or account balance being tested.

  • Adjustment: This is the amount being excluded from the Total Population to calculate the value of the population that remains untested.

  • Sample Population: This is the value of the population that remains untested which was calculated by subtracting Adjustments from the Total Population above. Items that were excluded may include:

    • the value of items substantiated by other audit procedures;

    •  items specifically tested above a certain monetary value;

    • items not to be tested, for example, if there is an insignificant risk of material misstatement for those items.


Projecting Misstatements in the Population


  • Population (Untested): The value of the population that remains untested. The population size should exclude:
    (a) the value of items substantiated by other audit procedures;
    (b) items specifically tested above a certain monetary value;
    (c) items not to be tested, e.g., if there is an insignificant risk of material misstatement for those items.

  • Total amount of sample: This amount is the total amount of the sample tested.

  • Total misstatements in the sample: This amount is the total net amount of the misstatements found in the sample tested.

  • Projected misstatement/s in the population as a whole (Adj Entries-proposed): This estimate is the projection of the misstatements in the sample across the population. Estimated misstatement is calculated using the formula: (Total misstatements in the sample / Total amount of sample) * Total population.

  • Tolerable Misstatement: This is the tolerable misstatement as entered above.




Audit Conclusion

The Sampling Audit Conclusion is standard and non-modifiable.


You only need to sign-off the conclusion by selecting the checkboxes provided. Your initials and date will automatically appear.






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