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Auditors describe risk-based sampling and unpredictability in testing
Summary
Committee members asked how auditors sample transactions; the auditor said the firm uses a risk-based approach, larger samples in higher-risk areas like cash and property taxes, confirmations with external sources, and yearly unpredictability in procedures.
A committee member asked whether auditors use sampling for transaction testing. "I presume there's some sort of sampling process inside the transaction?" the committee member asked. Presenter Moffitt replied that the firm uses a risk-based approach and increases sample sizes in higher-risk areas.
Moffitt described testing that includes confirmations for property tax revenue with the county and emphasized adding an element of unpredictability each year so the same items are not audited repeatedly. He said cash-related areas tend to be higher risk and receive more extensive testing.
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