When using monetary unit sampling, the allowance for sampling risk is composed of
After you have performed your audit procedures on the set of sampled data you can use Analytics to: Show
Even if you found no errors, you still use the evaluation feature to calculate the basic allowance for sampling risk. Note Evaluating errors requires input of some of the values previously generated by calculating sample size. To use the evaluation feature with the results of a monetary unit sample, you must have drawn the sample using either the fixed interval or the cell selection methods. How evaluation and comparison workWhen you evaluate, Analytics uses a statistical formula to project the misstatements you found in the sample to the entire account, and calculates the Upper Error Limit (upper misstatement limit). You compare the calculated value to the Materiality that you decided upon earlier when you calculated sample size. Based on the comparison, you decide if monetary data is fairly stated.
StepsNote Do not include the thousands separator, or the percentage sign, when you specify values. These characters prevent the command from running, or cause errors.
Evaluate dialog box inputsThe table below provides detailed information about the input values in the Evaluate dialog box. Main tab – input values
The figure below shows an example of input values for evaluating errors in a monetary unit sample.
ResultsEvaluating the errors you found in a monetary unit sample produces the following results:
The figure below shows the results of evaluating errors found in a monetary unit sample.
What the “Upper Error Limit” tells youThe total amount of Upper Error Limit, when compared to the Materiality that you decided upon when you calculated the sample size, tells you:
ExampleYou evaluate the errors you found in a monetary unit sample and Analytics returns an Upper Error Limit of $28,702.70. This amount is less than the Materiality (tolerable misstatement) of $29,000 that you specified earlier when you calculated the sample size, and specified a confidence level of 95%. Based on this information, you can make the following statement: There is a 95% probability that the actual misstatement in the account balance does not exceed $28,702.70. If the Upper Error Limit is greater than $29,000, the account balance is probably materially misstated. You need to decide upon further appropriate steps to meet your audit objective. How the Upper Error Limit is calculated for monetary unit samplingThe Upper Error Limit calculated by Analytics is a compound figure that adjusts for sampling risk – that is, the risk that misstatements in the sampled amounts underrepresent the true total amount of misstatement in the account balance you are examining. Show me more Upper Error Limit is the sum of the following amounts:
What is monetary unit sampling?Monetary unit sampling (MUS) is a statistical sampling method that is used to determine if the account balances or monetary amounts in a population contain any misstatements.
When should you use monetary unit sampling?Monetary unit sampling is appropriate for use with substantive or misstatement testing. By biasing larger amounts, monetary unit sampling provides a high level of assurance that all significant amounts in a population are subject to testing.
Which of the following sample selection methods is most appropriate for a statistical monetary unit sampling procedure?Random selection
This method of sampling ensures that all items within a population stand an equal chance of selection by the use of random number tables or random number generators. The sampling units could be physical items, such as sales invoices or monetary units.
Which of the following is the primary objective of monetary unit sampling Mus?Which of the following is the primary objective of monetary-unit sampling (MUS)? To identify overstatement errors. MUS gives each monetary unit in the population an equal chance of selection.
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