It is hard to believe that standards could differ on something that is as seemingly objective as sampling. However, like many things in auditing, there is often considerable leeway around what is right or wrong (that is why professional judgment is so important). Canadian and PCAOB standards differ significantly on the treatment of anomalies. Auditors need to obtain evidence if the control deviation or misstatement is an anomaly.
REQUIRED
a. Referring to CAS 530 A19 and PCAOB AU-350.25, explain the differences between the two standards regarding the auditor's responsibility for the consideration of anomalies in projecting the error on the total population.
b. Explain the impact of the two different approaches on audit effectiveness. ( Hint: Think about which approach would enable an auditor to fail to project errors in order to avoid potential disputes with the client.)