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

While testing a sample of purchase invoices at Narmada Steels Ltd, the auditor finds that the file for one selected item has been lost and the designed procedure cannot be applied to it. Which description fits this event under SA 530?

Lost documentation for a selected item is an example, given in SA 530, of the auditor being unable to apply the designed audit procedures to that item. It is a performance problem for the sampled item, not a frame or method issue.

  1. AIt is an example of being unable to apply the designed audit procedures to a selected itemCorrect
  2. BIt is an example of a tolerable deviation that needs no further consideration
  3. CIt shows that the sampling frame was incomplete
  4. DIt is an example of the auditor choosing a non-statistical sample

Explanation

SA 530 gives lost documentation relating to a selected item as an example of the auditor being unable to apply the designed audit procedures to that item. It is not a sampling frame issue or a choice of method. The auditor must then consider how to deal with the item.

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