Page 26 - Auditing Standards

As of December 15, 2017

.23 The particular means or combination of means of selecting items for testing that is appropriate
depends on the nature of the audit procedure, the characteristics of the control or the items in the account
being tested, and the evidence necessary to meet the objective of the audit procedure.

Selecting All Items

.24 Selecting all items (100 percent examination) refers to testing the entire population of items in an

account or the entire population of occurrences of a control (or an entire stratum within one of those
populations). The following are examples of situations in which 100 percent examination might be applied:

The population constitutes a small number of large value items;

The audit procedure is designed to respond to a significant risk, and other means of selecting items

for testing do not provide sufficient appropriate audit evidence; and

The audit procedure can be automated effectively and applied to the entire population.

Selecting Specific Items

.25 Selecting specific items refers to testing all of the items in a population that have a specified
characteristic, such as:

Key items. The auditor may decide to select specific items within a population because they are
important to accomplishing the objective of the audit procedure or exhibit some other characteristic,
e.g., items that are suspicious, unusual, or particularly risk-prone or items that have a history of

error.

All items over a certain amount. The auditor may decide to examine items whose recorded values
exceed a certain amount to verify a large proportion of the total amount of the items included in an

account.

.26 The auditor also might select specific items to obtain an understanding about matters such as the

nature of the company or the nature of transactions.

.27 The application of audit procedures to items that are selected as described in paragraphs .25-.26 of

this standard does not constitute audit sampling, and the results of those audit procedures cannot be
projected to the entire population. 12

Audit Sampling

.28 Audit sampling is the application of an audit procedure to less than 100 percent of the items within an

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