NON-STATISTICAL SAMPLING 0520.

10

Sign-off: Initials Date

Client name:
Prepared:
Period end: Reviewed:

This form documents the basis to arrive at the samples used in the engagement using non- statistical sampling method.

A. Population Data

Audit procedure Comment and/or Ref.

Audit Assertions(s) being tested: C, A, E or V

Nature of population (e.g. Alphabetical listing,
numerical listing)
Primary sampling unit (e.g. Dollars, kilogrammes)

B. Sample Size Determination

Answer or
# Description of factor or amount Comment and/or Ref.
Amount
A. Risk Assessment – Low or High
B. Reliance on Controls – Yes or No
C. Reliance on Analytical Procedures – Yes or No

Use the Audit Response Decision Tree to determine the following Assurance and Expansion factors.

D. Assurance Factor

E. Expansion Factor

$/£

F. Performance Materiality 420.MPQ

G. Population

H. Key Items (high value or unusual items) ○

i

Define what is considered in determining key items:

Population to sample
I.
(Population - Key Items)

J. Expected Error ○
i

K. Sample Size =

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 NON-STATISTICAL SAMPLING 0520.10

Sample size = (Population being subject to sampling × Assurance Factor) ÷ (Performance Materiality – (Expected Error ×
Expansion Factor))
or
K = (I x D) ÷ (F – (J × E))

C. Sample errors

Audit procedure Y or N Comment and/or Ref.

If Yes, go to D – Error Evaluation

Were there any errors found in the sample? ○
i
If No, go to E - Conclusion

D. Error Evaluation

No. Description of factor or amount Book Value Amount of Error

Totals

(a) (b)
-
L. Error in Key Items (high value or unusual items)

Project error from sample = Population to sample (I) × -

M.
Amount of Error (b) ÷ Book Value (a)
Projected Misstatement (total of errors in key items plus -
N.
projected error from sample)
-
O. Tolerable Error = Expected Error (J) * 110%

E. Conclusion as to the Assertions(s) Being Tested

Audit procedure Y or N Comment and/or Ref.

Have the planned confidence level specified in the

sample design and the audit objectives of this test
been achieved. If No, explain.

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 NON-STATISTICAL SAMPLING 0520.10

Guidance for H. Key Items

The auditor shall first remove key, large (larger than 33% of Performance Materiality - ) and unusual items (for example,
negative balances) from the overall population to be tested. These items shall be tested individually and sampling shall be
applied to the remaining sample population.

Guidance for J. Expected Error

Using professional judgment, the auditor shall determine the Expected Error within the overall population. The auditor shall use
his understanding of the entity and previous experience to estimate Expected Error. The sample size decreases as Expected
Error is decreased.

However, as explained below, if the actual error exceeds tolerable misstatement, then the audit sampling procedure will not
have provided a reasonable basis for conclusions.

Guidance for Conclusion

If sample size is not sufficient to support the conclusion or projected misstatement > tolerable error:
Extend the sample size by revising the expected error
Request management to investigate misstatements identified and the potential for any further misstatement and to make any
necessary adjustments.
Conduct alternative audit procedures
Consider the impact of projected misstatement on the audit report
Consider recording known errors in key items.
Audit Response Decision Tree

Tests of detail
Risk Assurance Assurance from
Materiality from Tests of Analytical Sampling
Assessment Controls Procedures JSSD testing
AF EF

No N/A 3.0 1.9

No
Yes N/A 2.5 1.6
High
No N/A 1.6 1.5
Yes
Yes 5 to 15 1.0 1.3

No N/A 1.8 1.5

No
Yes 0 to 10 N/A
Low
No 4 to 10 N/A
Yes
Yes N/A N/A

AF = Assurance Factor, EF = Expansion Factor

Alas, Oplas and Co., CPAs