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CS Professional · Compliance Management, Audit and Due Diligence · Audit Principles and Techniques

When designing tests of controls and tests of details for Ritu Exports Ltd, the auditor asks what SA 500 requires about choosing items for testing. Which statement is correct?

SA 500 requires the auditor, when designing tests of controls and tests of details, to determine means of selecting items for testing that are effective in meeting the purpose of the audit procedure. It does not prescribe statistical sampling only or let management dictate selection.

  1. AThe auditor shall determine means of selecting items for testing that are effective in meeting the purpose of the audit procedureCorrect
  2. BThe auditor shall always select items using statistical sampling only
  3. CThe auditor shall select only items that management identifies as significant
  4. DThe auditor shall select items only after issuing the audit report

Explanation

SA 500 requires that when designing tests of controls and tests of details, the auditor shall determine means of selecting items for testing that are effective in meeting the purpose of the audit procedure. It does not mandate statistical sampling, nor selection driven by management.

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