ACCA Advanced Audit and Assurance (AAA) Practice Exam

What is the primary purpose of audit sampling?

1. To evaluate all items within the population

2. To provide a basis for drawing conclusions about the entire population

3. To increase the audit duration

4. To eliminate the need for audit procedures

The correct answer is: To provide a basis for drawing conclusions about the entire population

The primary purpose of audit sampling is to provide a basis for drawing conclusions about the entire population. In auditing, it is often impractical or impossible to examine every single item in a large population due to constraints such as time and resources. Therefore, auditors use sampling techniques to select a representative subset of items, which they analyze in detail. By evaluating this sample, auditors can then make reasoned inferences about the characteristics or compliance of the entire population. This approach allows auditors to form conclusions regarding risk assessments, the effectiveness of internal controls, and the overall fair presentation of financial statements, ensuring that the audit is still meaningful and effective without having to review every single transaction or item. In contrast, evaluating all items within the population is not feasible in most audits and would not serve the purpose of making conclusions efficiently. Increasing the audit duration unnecessarily is not a goal of sampling; rather, efficient use of time is key. Lastly, audit sampling does not eliminate the need for audit procedures; it simply allows auditors to conduct these procedures on a manageable portion of the total population while still drawing valid conclusions.