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Chapter 9 - Testing and Evaluation Systems

The document discusses audit sampling and materiality. It defines audit sampling as a technique auditors use to gather evidence by selecting transactions, documents, and account balances to test. It also defines materiality as an important concept for determining if a company's financial statements provide a true and fair view by assessing the level of misstatement that would be misleading. The two concepts are related as auditors assess the significance of errors found in samples against the concept of materiality. The document then discusses objective of sampling, judgmental vs statistical sampling, and how materiality is considered at different stages of the audit process.

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88 views16 pages

Chapter 9 - Testing and Evaluation Systems

The document discusses audit sampling and materiality. It defines audit sampling as a technique auditors use to gather evidence by selecting transactions, documents, and account balances to test. It also defines materiality as an important concept for determining if a company's financial statements provide a true and fair view by assessing the level of misstatement that would be misleading. The two concepts are related as auditors assess the significance of errors found in samples against the concept of materiality. The document then discusses objective of sampling, judgmental vs statistical sampling, and how materiality is considered at different stages of the audit process.

Uploaded by

Wiratama Susetiyo
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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UNIVERSITAS KRISTEN DUTA WACANA

Chapter 9
PROGRAM STUDI AKUNTANSI

Testing and Evaluation


2020

of Systems

PE N GAU D ITAN 2
TUJUAN PEMBELAJARAN

Pada pertemuan ini Mahasiswa dapat:

 Menyusun tujuan audit dan sistem untuk komponen tertentu pada laporan keuangan
 Mengevaluasi sistem yang digunakan pada area tertentu dan menyusun kesimpulan audit
 Menjelaskan peran dari pengujian terhadap pengendalian, dan penggunaannya untuk menguji
sistem komputer
WALK THROUGH TEST,
TEST OF CONTROL,
SUBSTANTIVE TEST
TEST OF CONTROLS AND SUBSTANTIVE TESTING
PARA A4 ISA 330
‘The auditor’s assessment of the identified risks at the assertion level provides a basis for
considering the appropriate audit approach for designing and performing further audit
procedures. For example, the auditor may determine that:
(a) Only by performing tests of controls may the auditor achieve an effective response to
the assessed risk of material misstatement for a particular assertion;
(b) Performing only substantive procedures is appropriate for particular assertions and
therefore, the auditor excludes the effect of controls from the relevant risk assessment.
This may be because the auditor’s risk assessment procedures have not identified any
effective controls relevant to the assertion, or because testing controls would be
inefficient
and therefore the auditor does not intend to rely on the operating effectiveness of
controls
in determining the nature, timing and extent of substantive procedures; or
(c) A combined approach using both tests of controls and substantive procedures in an
effective approach
TEST OF CONTROLS AND SUBSTANTIVE TESTING
PARA A4 ISA 330
Para 18 ISA 330:
‘Irrespective of the assessed risks of material misstatement, the auditor shall design
and perform substantive procedures for each material class of transactions, account
balance, and disclosure.’
Para A43:
‘Depending on the circumstances, the auditor may determine that:
performing only substantive analytical procedures will be sufficient to reduce audit
risk to an acceptably low level. For example, where the auditor’s assessment of risk
is supported by audit evidence from tests of controls.

Only tests of details (a substantive procedure) are appropriate.

A combination of substantive analytical procedures and tests of details are most


responsive to the assessed risks.’
EXAMPLES OF TESTS OF CONTROLS

 Tests of Information/Audit Trail


 Testing outputs on a restricted basis
 Interviews with company staff (inquiry) using interviewing style conducive to
getting people to be open with them
 Observing staff at work (observation), keeping eyes open and not assuming staff
will always operate in the manner they have told you they do
 Re-performance of control procedures
 Examination of management reviews
 Testing reliability of budgets prepared by management
Figure 9.5 Walk-through tests, tests of control and
substantive procedures: conclusions, decisions and extent
of tests and procedures
Figure 9.6
AUDITING ROUND AND THROUGH THE COMPUTER
PROGRAM STUDI AKUNTANSI
UNIVERSITAS KRISTEN DUTA WACANA
2020

PE N GAU D ITAN 2
Chapter 11

Materiality
Sampling and
TUJUAN PEMBELAJARAN

Pada pertemuan ini Mahasiswa dapat:

 Mendiskusikan pentingnya audit sampling


 Membedakan antara non-statistical dan statistical sampling
 Mendeskripsikan langkah utama dan data yang dibutuhkan auditor untuk melakukan statistical
sampling
 Mendiskusikan pentingnya konsep materialitas
 Menjelaskan peran materialitas kaitannya dengan laporan keuangan
 Menjelaskan bagaimana auditor menentukan level materialitas dan menggunakannya pada
berbagai jenis tahapan audit
AUDIT SAMPLING AND
MATERIALITY
AUDIT SAMPLING is one method auditors use to gather evidence to reach an opinion
on financial statements. When auditors select transactions, documents, accounts balances
for testing they take a sample, using audit sampling as a techniques

MATERIALITY is vital concept when auditors seek to determine company’s financial


statements give a true and fair view. Without an idea of what level of misstatement on
financial statements would be misleading, auditors would not be able to evauate the
importance of misstatements discovered during audit testing

The two concepts are related:


When auditors assess significance of errors or misstatement in sample, they are putting
into operation concept of materiality
OBJECTIVE OF SAMPLING

 To provide a reasonable basis for the auditor to draw conclusions about the
population from which the sample is selected (ISA 530)

 Auditors must decide when appropriate to use sampling

 Sufficiency, Relevance and Reliability apply to audit sampling


-- Is sample large enough to be representative of population?
-- Is sample relevant in the circumstances of this population?
-- Will selection procedures achieve a sample representative
enough to assess the reliability of the population?
JUDGEMENTAL SAMPLING

 Auditors use judgment in selection of samples and their interpretation


 Judgment has to be exercised in both statistical and non-statistical
sampling.
 But non-statistical sampling is said to be judgmental sampling because all
aspects of sampling require exercise of judgement
 Problem with judgmental sampling is that characteristics of sample do not
necessarily reveal characteristics of population
STATISTICAL SAMPLING

 For sample to be representative must be homogeneity in the population –


often different degrees of risk in items in population. Examples of lack of
homogeneity:
 Transactions not subjected to same internal controls, e.g. large
transactions treated differently from small, or controls more lax in one
part of period. Balances in a population may have widely different values.
Because of of lack of homogeneity – common practice stratify and to
treat different strata as different populations
 Sample can only be truly representative if it is taken from the whole
population

MATERIALITY - INTRODUCTION

 Financial statements do not give a true and fair view when misstatements
are significat or material
 Misstatements, including omissions are considered to be material if they,
individually or in the aggregate, could reasonably be expected to
influence the economic decisions of users taken on the basis of the
financial statements. Judgements about materiality are made in the light
of surrounding circumstances, and are affected by the size or nature of a
misstatement, or a combination of both
 Materiality and size are related but factors other than size may be
important
MATERIALITY STAGE

 Materiality in the financial statements

 Materiality at the planning stage

 Materiality during the audit

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