Skip to content

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

While auditing Bharat Textiles Ltd, the auditor must decide how to select items for a test of details on a large population of purchase invoices. Which of the following sets lists the means of selecting items for testing that are available to the auditor under SA 500?

Under SA 500 the auditor can select items for testing by examining all items (100% examination), selecting specific items, or using audit sampling. Any one or a combination may be used depending on circumstances. Inquiry, observation and sampling methods like random selection are different concepts.

  1. ASelecting all items, selecting specific items, and audit samplingCorrect
  2. BInquiry, observation, and external confirmation
  3. CRandom selection, systematic selection, and haphazard selection
  4. DSelecting all items, management representation, and analytical review

Explanation

SA 500 states the means available for selecting items for testing are selecting all items (100% examination), selecting specific items, and audit sampling. Options naming random, systematic and haphazard are sampling methods within audit sampling, not the three means. Inquiry and observation are audit procedures, not selection means.

Did you get it right without looking?

One question tells you little. A timed set on Audit Principles and Techniques shows your real accuracy, how long you take and where you lose marks.

Practise Audit Principles and TechniquesFree diagnostic mock

More Audit Principles and Techniques questions