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CA RAVI TAORI recovery of credit sales without any authorization. Article failed to point it out as irregularity as all
AUDIT EVIDENCE
AUDIT BHASKAR CH 04 - PART 06 AUDIT BHASKAR CHAPTER 07 (CNO—SA530.080) SAMPLING PROCESS (MCQ-Incs.16.5, Incs.82.4, Incs.82.5)

details were on printed documents.

Chart
SAMPLING PROCESS

It is preliminary sampling step. Suppose we have to examine
1. Sample
occurrence of sales. We have to determine our objective
(catch fake sales), audit procedures (match with despatch report)
Designing
etc are decided in this step.

Of East / West / South / North area so total 200 x 4 = 800 from
2. Sample Size
population of 5000

3. Selection After analysis of various factors it was set as 200 units from each
of Items for
Testing Stratified Random Sampling
(Sampling
Selection
Method)

4. Performing
Audit Inspection of documents & Inquiry from sales executive.
Procedures

5. Nature and
Cause of Intentional or Unintentional / Manual or Automated
Deviations and
Misstatements

6. Projecting If there are fake sales in sample, then how much in whole population.
Misstatements

7. Evaluating
Results of Whether misstatements are within tolerable limit?
Audit Sampling& Whether further audit procedures should be applied.
Taking Action

(CNO-SA530.100) STEP 1 - SAMPLE DESIGN (QNO-530.03)

Chart SAMPLE DESIGNING

Population Related:
1) Define Population & Study characteristics
2) Stratification (decide on what criteria to make stratas)

Next 4 points in flow
1) Decide Purpose/Objectives/assertion to be examined
2) Decide Audit Procedures to be performed
3) Nature of Audit Evidence to be obtained
4) Explain what constitutes to misstatement

Considerations
(Consider Purpose / Audit Procedures / Nature of Audit Evidence Required / What Constitutes Deviation or
while designing
Misstatement Then Define Population and Consider Characteristic of Population for Stratification)
sample

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