An auditor plans to examine a sample of 40 canceled checks for a countersignature which is prescribed in the client's control procedures manual.Two of the checks in sample cannot be located by the company or the auditor.The auditor would most likely:
A)treat the missing checks as a deviation when evaluating the results of the sample.
B)draw a conclusion on a sample size of 38.
C)substitute two more checks to get to a sample size of 40.
D)recalculate the sample excluding the original 40 checks.

Question

Quizplus · Accepted Answer

The missing checks should be treated as deviations because they cannot be examined for compliance with the control procedure, which is the purpose of the audit test.

An Auditor Plans to Examine a Sample of 40 Canceled