Transactions testing and sampling

Overview

Sampling and testing of that sample is used in the planning area and also in the evidential testing areas (planning – for tests of controls in the internal controls section and substantive testing in the evidential testing area - say testing a sample of payments). The style of tests is similar in each place:

  • Sampling may be judgemental, created using the firm’s own internal policies (describe in rationale for sample selection)
  • Or in substantive testing areas the sample size may obtained using optional sampling tool, based on performance materiality for that area of the audit

 

Testing page creation

Testing pages are subpages of normal work papers created on an as-required basis. For example here from on a page in the internal controls planning area: 

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  • Selecting reliance to be placed on internal control(s), test control(s) option will create a further workpaper (B4 in this case): AA1.png
  • These testing pages are usually respawners - in other words the dialog box stays available allowing multiple versions of the testing pages with their own testing tables to be created for say, different types of revenue
  • When using multiple versions of a testing page in the same section use different names be used to differentiate the pages as they will both be referenced with the same number in the index - rename say by division: AA1.png
  • On the subpage (detailed testing page) enter the details requested to describe the test to be carries out, and select the tests required: AA1.png

In the substantive testing area the detailed testing page will include the option to select from the drop-down the account(s) or sub-total(s) from the trial balance to be included in the tests on this page – in this case for substantive testing in the expenditure section: 

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  • Tests are selected to a be applied against the sample from the options in the drop-down or custom tests may be created using the other test icon: AA1.png
  • Next the sample size and rationale for this decision is required - may be stated by way of narrative or in the substantive testing sections there is an optional sampling tool to help the user to create a sampling interval based on the population, materiality and sampling confidence levelAA1.png

Following through the checklist will produce a report showing how many tests will be required and generating a random starting point for running the sample: 

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  • The sample itself is then obtained by creating a spreadsheet of the complete data set, making a running total column, then stepping through that running total starting from the random number generated ($2355 in example above), then adding the sampling interval ($4000 in example above) which should give the number of test items required (21 in example above)
  • This spreadsheet may then be filtered down a table containing just the test items ready to be imported into the testing table like this: AA1.png

 

Setting up testing table

Testing tables are like enhanced spreadsheets. They differ from normal work papers in that the do not use conclusions, and they cannot be shared

  • From testing pages a testing table is created: AA1.png
  • Preselected columns are included: AA1.png
  • These columns may be edited and added to from the parent page: AA1.png
  • The data columns should correspond with the data being imported from the sample above – either change the import sample to suit the columns or change the columns to match the import
  • There is a limit to the number of columns depending on the fit on the page - for extra width landscape may be selected from drop down – data columns may be added from the please select dropdown, removed or moved

 

Data entry and testing

Once tables are ready with data columns and tests, data is added and testing begins. Exception reporting is utilised, with only incomplete items or deviations being reported back to the parent page:

  • Transactions may be added manually or imported into a testing grid
  • To enter manually go to table and click add to enter data line by line
  • Or import from the Excel/CSV already created - no headings are required as these should correspond to the table set up
  • On the table chose import and browse to Excel/CSV file created: AA1.png
  • Save to display table ready for testing process: AA1.png
  • Click pending tests to display test then complete each test specified: AA1.png
  • Comments may be added to explain any deviations – extra comments may also be added once item has been saved (from dropdown box at right)
  • Attachments may also be added (once item has been saved) from the dropdown box at right (such as scanned copies of the items being tested): AA1.png
  • Cross references may be made from tables - to any other page or attachment or document or table in the workbook - to do this add a comment to the row to see the familiar cross reference selection at the bottom
  • Amount columns in tables show totals total number of samples and total value of sampled items: AA1.png
  • The clear all button removes all transactions - or individual transactions may be edited or removed from the edit icon on the left of the sample item line
  • The sequence of transactions may be changed by dragging and dropping the edit icon
  • Tables show in the index with a unique icon ()
  • The number of deviations and pending tests are shown on detailed testing page (where table branches): 

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  • Management points may be created from detailed testing page (not from table itself yet)
  • Results are analysed on the detailed testing page – assessing the nature and cause of deviations and misstatements, projecting these into the sample, considering extending testing or further risk assessment required and evaluating results in terms of whether goals of testing reached
  • Tables are also used to create mail-merged documents e.g. debtors circularisation and non-monetary testing such as minutes review

 

 

 

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