4. Create a sampling program or the audit universe for revenue transactions incl

Question

4. Create a sampling program or the audit universe for revenue transactions including analytical procedures, substantive testing, and use information from the revenue dashboard provided. 5. Describe how your firm will implement technology into the audit plan to reduce your detection risk overall. Be sure to address if the use of technology replaces or supplements your other substantive testing. Sales Performance Dashboard September 24, 20x1 Daily Key Performance Indicators Total Daily Sales $ PY Daily Sales $ $372.6 M $279.4 M Member Sales-$ Total Daily Sales # PY Daily Sales # 3.34 M 2.37 M Daily Sales PY Daily Sales YTD Total Sales PYTD Total Sales Avg. Daily Sales 153.68 M 125.74 M Member Sales-# Items 38.421B 198.35 M 31.435 B Member 223.54 M 149.03 M 55.885 B 37.257 B Non-Member 189.07 M Daily Sales PY Daily Sales YTD Total Sales PYTD Total Sales Avg. Daily Sales 1.242 B 1.490 B 4.15 M 4.66 M 1.038 B 1.164 B 4.41 M 7.56 M PY Total # Members Member Non-Member 4.97 M 5.96 M Total # Members 44.6 M 38.7M PY Prior Year YTD Year To Date PYTD Prior Year to Date Avg. Average

Explanation / Answer

Sampling plan:

Here, you can go with the audit sampling which can be with statistical approach or non statistical approach.

At first decide your audit objective.

Now, in not statistical sampling generally, the auditor has to use his/her knowledge to select the variables required to sample.

In statistical sampling consider all the data available. Make sure you have software (Excel) to store and analyze the data.

Next decide your sampling frame. A sampling frame is defines as the frame/unit from which you are going to sample. You can get data stored/recorded automatically in the system (ask a software expert to get the data).

Remove the rows corresponding to negative values and NA values (NA means values not available). Once you have data in hand, see for the variables which are important and appropriate for your analysis.

Here, it is better to use audit analysis. Using audit analysis will reduce the risk. In audit analysis, you have to keep control on all the entries. There is need of examining 100% transactions to check whether there is any misstatement and to check whether they are complete and accurate. There is some risk in handling and storing the data but, storing it as electronic file will reduce the risk. Special audit analytics software like ACL will help you in analysis. To confirm that audit analytics is correct try on sub set of sample first. Make the procedure centralized so that you can access it from anywhere and someone can help you with it by accessing it from distance.

There is also an ad-hoc procedure to check and re-ensure that the results are valid and correct.

Related Questions

Navigate

• Browse (All)
• Browse 4
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.