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Unexamined Sample Items CheckDo Missing Items Change the Conclusion?

How many items do I need to look at, and which ones?

Treat sample items you could not examine as fully misstated and see whether the projected misstatement still stays under tolerable misstatement.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Projected misstatement with unexamined items as misstatements
$71,333
Worst case: each unexamined item fully misstated
Projected misstatement, examined items only
$15,333
Room to tolerable misstatement
$3,667
Drawn to one scale
Projected misstatement, examined items only$15,333
Projected misstatement with unexamined items as misstatements$71,333
Room to tolerable misstatement$3,667
All results
MeasureResult
Projected misstatement, examined items only$15,333
Projected misstatement with unexamined items as misstatements$71,333
Room to tolerable misstatement$3,667
Conclusion
Treating the items as misstated does not push the projection past tolerable: examining them is not needed for the conclusion
How this was worked out
Work shownrecomputed as you type
Base projection = misstatement found / sample book value x population book value
Worst case = (misstatement found + book value of unexamined items) / sample book value x population book value
If the worst case does not exceed tolerable, the unexamined items do not change the conclusion

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Base projection = misstatement found / sample book value x population book value
  • Worst case = (misstatement found + book value of unexamined items) / sample book value x population book value
  • If the worst case does not exceed tolerable, the unexamined items do not change the conclusion

How it works

AU-C 530 paragraph .A19 covers sample items the auditor cannot examine, for example when supporting documents cannot be found. If treating those items as misstated would not push the projected misstatement past tolerable misstatement, examining them is not needed. Otherwise paragraph .11 requires alternative procedures, and if those cannot be done the items are treated as misstatements.

This check projects the worst case by ratio. Missing support is also a fraud risk signal: AU-C 530 points to AU-C 240 for considering why the items could not be examined.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

What is a suitable alternative procedure?

For an unanswered receivable confirmation, AU-C 530 .A20 gives the example of examining subsequent cash receipts with evidence of their source and the items they settle.

Does this apply to tests of controls?

Yes, as deviations. Count each unexamined item as a deviation and re-evaluate the upper deviation limit.

Should the items be replaced with new picks?

Replacement fits items where the procedure does not apply, such as a properly voided check. Missing support is not that case.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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