The auditor uses monetary unit sampling to select a sample of expense items for testing from a population of expenses. Subsequent to selecting this sample of expense items, the client identifies additional expenses not included in the population and included in the audited financial statements. The auditor in this situation must include these additional expenses as part of the population subject to the sampling and select a revised sample of expense items for testing.

Question

Quizplus · Accepted Answer

This is because the additional expenses identified by the client represent a material misstatement of the financial statements, and therefore the auditor must include them in the population subject to sampling and select a revised sample for testing to ensure that the financial statements are fairly presented. Skipping these expenses would compromise the audit opinion.

The Auditor Uses Monetary Unit Sampling to Select a Sample