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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Audit procedures and obtaining evidence

When designing a sample to test fixed asset additions at Tavian Co, the auditor decides to test all additions above 150,000 individually and sample from the remainder. Which feature of ISA 530 or audit practice does this illustrate?

This is isolating high-value key items for 100% examination and sampling only the remaining population. The key items are tested in full, while sampling conclusions apply only to the residual items. Sampling risk still exists for that remainder, so the approach does not eliminate it.

  1. ATreating high-value items as a separate population or key items, with sampling applying only to the residual populationCorrect
  2. BUsing non-statistical sampling to avoid sampling risk
  3. CApplying systematic selection with a random start
  4. DConcluding that the population is homogeneous

Explanation

Testing all items above a threshold (key or individually significant items) means 100% examination of that part, with sampling used for the remainder. This is a form of selecting specific items, and the results of the two parts are evaluated separately. It is not about avoiding sampling risk entirely, since the residual sample still carries it.

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