Annual Audit Manual

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7041.2 Documentation of tests of details
Dec-2011

In This Section

Documentation for tests of details

Overview

This topic explains:

  • The items to be documented for each type of tests of details
Documentation for tests of details

OAG Guidance

The following table outlines the items to be documented for each of the types of tests of details: targeted testing, accept-reject and audit sampling (statistical and non-statistical sampling).

Item to be documented

Targeted Testing

Accept-Reject Testing

Audit Sampling

The objectives of the test (assertions being tested) and a description of the audit procedures applied to items tested.

X

X

X

The definition or physical representation of the account or population (e.g., the name of the specific client report as of a particular date)

X

X

X

The definition of a misstatement/exception

X

X

X

The amount of evidence desired (High, Moderate, Low)

N/A Adequacy of extent of testing is typically done along with evaluation of results

X

X

Estimated and tolerable misstatement

N/A

X

Number of exceptions tolerated.

X

The number of items tested

Ordinarily evident in documentation of specific items tested

X

Documented to show linkage with applicable sample size selection table.

X

Documented to show linkage with applicable sample size selection.

The basis of selection (random, haphazard, systematic, coverage, risk-based) and items selected for testing1

X

Coverage or risk-based

N/A

X

Random, haphazard or systematic.

List of misstatements identified

X

X

X

Projected misstatement

N/A

N/A

X

An evaluation of results

X

Consider whether evidence is needed for the remaining balance after targeted testing. Document the rationale for the disposal of the untested balance.

X

X
  1. The identification of the items tested includes the source from which the items were selected, the specific criteria used, and other identifying characteristics of the specific items selected. For example:
    • When a random or haphazard sample is selected or when items are selected judgmentally for targeted or accept-reject testing, document in a list or table the identifying characteristics (e.g., the specific invoice number, and possibly the customer name and monetary amount, of each item selected).
    • When all items over a specified monetary amount are selected from a listing, describe the scope and identify the client record used (e.g., all invoices over $25,000 from the December sales journal).
    • When a systematic sample is selected, document the source of the items and the starting point and the sampling interval (e.g., a systematic sample of shipping reports was selected from the shipping log for the period from X to Y, starting with report number 14564 and selecting every 250th report from that point).

Retain confirmations received and third-party correspondence as this represents audit evidence from third parties.

Related guidance

See the following sections for details of available templates and other guidance on documentation: