Question 5 - Audit Sampling a) State the THREE possible actions the auditor can take when a population is rejected. (6 marks) b) Discuss each of the following steps included in the "evaluate the results" section for non-statistical sampling for test of details: (6 marks) I. Generalize from the sample to the population. i Analyze the misstatements. ili. Decide the acceptability of the population c) State the step that is different in the evaluate the results" section for non-statistical sampling for test of control from that for test of details. (2 marks) d) State the effect each factor below has on sample size (6 marks) FACTOR EFFECT ON SAMPLE SIZE 2 3 4 An increase in the auditor's assessment of inherent risk An increase in the auditor's assessment of control risk An increase in the amount of misstatement the auditor expects to find in the population Stratification of the population when appropriate An increase in the use of other substantive procedures directed at the same financial statement assertion An increase in the auditor's required confidence level (or conversely, a required decrease in the risk that the auditor will conclude that a material error does not exist, when in fact it does exist) 15 16