Audit Manual - Core Treasury System Uttarakhand

Government of Uttarakhand
Audit Manual
4 Execution of an Audit
This is the stage where audit plans are executed and observations are noted through systematic
application of audit procedures. The main focus in this stage is to ensure completion of the audit
programs and adequate documentation of the work done. This stage also involves the review of
the audit work done to ensure that the conclusion or observations reached are based on facts
and necessary documents to validate them have been collected and filed.
The first step in the process of execution is performance of audit steps detailed in the audit
program. Such performance entails the application of audit procedures. The auditors are
expected to have a fairly good understanding of these to be able to execute the steps evolved in
the audit program.
a) Sampling Methodology
Audit Sampling means the application of audit procedures to less than 100% of the items within
a class of transactions to enable the auditor to obtain and evaluate audit evidence about some
characteristic of the items selected in order to form or assist in forming a conclusion concerning
the population.
Due to shortage of time and manpower, it is difficult for IA teams to carry out hundred percent
checks of the departments etc. The IA team has to therefore make a selective approach by
random selection of months/ areas/ transactions to be scrutinized in detail.
When designing an audit sample, the auditor should consider the specific audit objectives, the
population from which the auditor wishes to take sample, and the sample size.
Determination of Population
The population is the entire set of data from which the auditor wishes to obtain a sample in order
to reach a conclusion. The auditor will need to determine that the population from which the
sample is drawn is appropriate for the specific audit objective.
Determination of the Sample size
The primary consideration in determining the sample size is the amount of assurance required.
While determining the sample size, the auditor should consider sampling risk, the tolerable error
and the expected error. When using either statistical or non statistical sampling methods, the
auditor should design and select an audit sample, perform audit procedures thereon, and
evaluate sample results so as to provide sufficient audit evidence
The table below details sample sizes to be used in performing department‘s testing.
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