FACTORS TO CONSIDER WHETHER OR NOT TO SAMPLE
Materiality: Expenditure such as motor vehicle expenses may be so small that no conceivable error may affect the true and fair view of the accounts as a whole.
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The number of items in a population. If these are few (for example land and buildings) 100% check may be economical.
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Reliability of other forms of evidence: Analytical review (e.g. wages relate closely to number of employees, budgets, previous years) -Proof in total (VAT calculations). If other evidence is very strong, then a detailed check of population (100% of a sample may be necessary).
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Cost and time consideration: Can be relevant in choosing between evidence seeking methods.
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A combination of evidence seeking methods is often the optimal solution.
When not to sample
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When populations are small. In cases it is more economical and effective to test the entire population.
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For transactions, or balances, though few in number are of great significance in terms of materiality.
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Any situation where the auditor is put on enquiry as a result of earlier tests or information received. E.g. where the auditor has received some indication of material fraud in a certain accounting area.
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For statutory disclosure items such as directors salaries where a full audit check will be desirable despite the relative materiality of the items concerned.
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For non-homogeneous populations where sorting of the information will have to take place before sampling can be attempted.