100% testing vs. sampling.


Statements made in a recent article, "Take My Manual Audit, Please" (JofA, June98, page 33), could set a dangerous precedent for auditors. The author wrote that "audit software lends itself to conducting 100% testing—not just sampling—of client data" and went on to describe the benefits of 100% testing.

Replacing sampling procedures with 100% testing of all data could raise expectations for the audit to a level that I think is unacceptable.

Published articles could be a source of authoritative support, and, if the author's views are followed, this could elevate testing standards to a level of practice that practitioners may not choose, or may be unable, to follow.

Our standard audit report tells the statement user, "An audit includes examining, on a test basis." The word test is intended to denote sampling rather than 100% testing. If the standards are to be changed, let the standard setters do it.

Charles Chazen, CPA
Los Angeles

SPONSORED REPORT

6 key areas of change for accountants and auditors

New accounting standards on revenue recognition, leases, and credit losses present implementation challenges. This independently-written report identifies the hurdles that accounting professionals face and provides tips for overcoming the challenges.

PODCAST

How tax reform will impact individual taxpayers

Amy Wang, a CPA who is a senior technical manager for tax advocacy at the AICPA, answers to some of the most common questions on how the new tax reform law will impact individual taxpayers.