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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Evidence and testing considerations

Auditors of Danby plc test purchase invoices for evidence of authorisation. The population has 4,000 invoices and the sample size is 80. The auditor picks a random start of 17 and then selects every nth invoice. What is the sampling interval, and what is a key risk of this method?

The interval is 50 (4,000 divided by 80). The main risk is that the population has a pattern matching the interval, which would make the sample unrepresentative and biased, so the auditor must check the population is not structured that way.

  1. AInterval of 50; the population may have a pattern that coincides with the interval, biasing the sampleCorrect
  2. BInterval of 80; the population must be sorted by value before selection
  3. CInterval of 50; it cannot be used for tests of controls
  4. DInterval of 25; it gives higher-value items a greater chance of selection

Explanation

Interval = 4,000 / 80 = 50. ISA 530 notes that with systematic selection the auditor must ensure the population is not structured so that the sampling interval corresponds to a particular pattern, otherwise the sample may be biased. The other options give wrong intervals or wrong claims; systematic selection can be used for control tests.

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