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CMA Intermediate · Corporate Accounting and Auditing · Audit Sampling, Audit Techniques and Analytical Procedure

Under SA 530 Audit Sampling, an auditor selects a cheque-payment voucher for testing, but the voucher turns out to be a voided one, so the audit procedure is not applicable to the selected item. What does the standard require the auditor to do?

The auditor must perform the procedure on a replacement item. SA 530 requires this when the procedure is not applicable to the selected item, such as a voided voucher, so the sample keeps its intended size and is not distorted by treating it as a deviation.

  1. APerform the procedure on a replacement itemCorrect
  2. BTreat the voided voucher as a deviation and ignore it in the sample size
  3. CDiscard the sample and test the entire population
  4. DConclude that the control is ineffective

Explanation

SA 530 states that if the audit procedure is not applicable to the selected item, the auditor shall perform the procedure on a replacement item. Treating it as a deviation would wrongly count a non-applicable item as a control failure. Testing the whole population or declaring the control ineffective is not required.

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