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Section:
ACCO 30043 Assignment Number 5
Discussion Questions for Substantive Testing, Audit Sampling, and Completing the Audit
1. An auditor typically works within economic limits. Explain this statement.
2. What are the generalizations on reliability of audit evidence?
3. What are the different types of substantive tests? Enumerate, and explain, each audit procedure
classified according to purpose and according to nature.
4. What are the different forms of confirmation request? What are the situations where each type
may be used?
5. What are accounting estimates? How are accounting estimates audited?
6. What is audit documentation? What are the purposes of audit documentation?
7. Can you eliminate sampling risk? Explain. Describe the relationship between sampling risk and
sample size.
8. How is non-sampling risk reduced?
9. In tests of controls, there are two types of sampling risk. For each type, give a short description and
identify whether it affects audit efficiency or audit effectiveness.
10. In substantive tests, there are two types of sampling risk. For each type, give a short description
and identify whether it affects audit efficiency or audit effectiveness.
11. Which one is of greater concern to the auditor: risk affecting audit effectiveness or risk affecting
audit efficiency? Explain.
12. Explain the following sample selection methods:
a. Random number sampling
b. Systematic-sampling
c. Block selection
d. Haphazard sampling
13. Discuss the following projection techniques:
a. Difference estimation
b. Ratio estimation
c. Mean-per-unit estimation
14. What is probability-proportional-to-size (PPS) sampling?
15. What are the standard audit completion procedures?
16. Enumerate the procedures to test for contingencies and commitments.
17. Enumerate the procedures to test for subsequent events in the context of an audit.
18. Explain the going concern assumption. Who is responsible for assessing the reasonableness of the
going concern assumption? Give at least three examples of conditions and events which may cause
the auditor to have doubt about the entity's ability to continue as a going concern.
19. What is the main concern of the auditor regarding related parties? Give examples of transactions
which may alert the auditor regarding possible previously unidentified related party transactions.
20. How is the management representation letter dated? What are the audit implications if
management refuses to give a representation letter?

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