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Track 3 of 19 · Core

Materiality and audit sampling

Materiality under AU-C 320 and AU-C 450, and audit sampling under AU-C 530: benchmarks, performance materiality, clearly trivial, attribute sampling for controls, monetary unit and classical variables sampling for balances, and projecting misstatements.

12 lessonsAbout 48 minAU-C 320 · AU-C 450 · AU-C 530
0 of 12 complete
Syllabus

For: Staff and seniors who set planning numbers or select and evaluate samples.

  1. 01Materiality concepts under AU-C 320What materiality means for a GAAS audit, the reasonable user AU-C 320 assumes, and the three uses of materiality in planning, performing and evaluating an audit.4 min · worked example · 3 self-check questions
  2. 02Choosing a materiality benchmark and percentageHow AU-C 320 factors guide benchmark selection, when to normalize earnings, benchmarks for nonprofits, governments and owner-managed entities, and documentation.4 min · worked example · 3 self-check questions
  3. 03Performance materiality and how to set itWhy AU-C 320 requires performance materiality below overall materiality, the factors that set it, and how tolerable misstatement applies it to a sampling test.4 min · worked example · 3 self-check questions
  4. 04Materiality for particular classes, balances and disclosuresWhen AU-C 320.10 requires a lower materiality level for particular items such as related party transactions or executive pay, and how to set and use it.4 min · worked example · 3 self-check questions
  5. 05Clearly trivial thresholds and accumulating misstatements (AU-C 450)How to set the clearly trivial amount, which misstatements to accumulate, the factual, judgmental and projected categories, and when the audit plan must change.4 min · worked example · 4 self-check questions
  6. 06Revising materiality as the audit progressesWhen AU-C 320.12 requires revising materiality, how actual results and AU-C 450.10 reassessment work, and what to do when materiality goes down late in the audit.4 min · worked example · 3 self-check questions
  7. 07What is and is not audit sampling, and sampling versus nonsampling riskThe AU-C 530 definition of audit sampling, why key items and 100% testing are not sampling, and the two kinds of sampling risk compared with nonsampling risk.4 min · worked example · 4 self-check questions
  8. 08Attribute sampling for tests of controlsHow to design an attribute sample for a control test: deviation definition, tolerable and expected rates, risk of overreliance, sample size and the upper deviation limit.4 min · worked example · 4 self-check questions
  9. 09Monetary unit sampling for tests of detailsHow monetary unit sampling works: sample size from tolerable misstatement and confidence factors, systematic selection, tainting, and the upper misstatement limit.4 min · worked example · 4 self-check questions
  10. 10Classical variables sampling: mean-per-unit, difference and ratioWhen to use classical variables sampling instead of MUS, how mean-per-unit and difference estimation work, and how to compute sample size and precision.4 min · worked example · 3 self-check questions
  11. 11Nonstatistical sampling and sample sizes that hold upHow AU-C 530 expects nonstatistical samples to be designed and sized, haphazard and random selection, and how to defend a sample size in review.4 min · worked example · 4 self-check questions
  12. 12Projecting misstatements and evaluating sample resultsHow to investigate misstatements, project them with ratio or difference methods, consider sampling risk, and decide what to do when results exceed tolerable.4 min · worked example · 4 self-check questions
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