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A88556 1 (2007-10-31)

handle is hein.gao/gaobadvvk0001 and id is 1 raw text is: im A 0 Comptroller General M M MAccountability * Integrity * Reliability of the United States United States Government Accountability Office Washington, DC 20548 October 31, 2007 International Federation of Accountants 545 Fifth Avenue, 14th Floor New York, New York 10017 Subject: International Auditing and Assurance Standards Board (JAASB) July 2007 Exposure Draft: ISA 530, Audit Sampling This letter provides the U.S. Government Accountability Office's (GAO) comments on the JAASB's proposed revisions to ISA 530. GAO is committed to transforming and modernizing the accountability profession; accordingly, we support the IAASB's efforts to improve the clarity of its auditing standards. Overall, we support the proposed revisions to ISA 530. In particular, we believe that the proposed revisions to ISA 530 help clarify the auditor's responsibility to project and evaluate sample results. In our review of the proposed standard, we identified certain issues for which we have proposed suggestions. Specifically, we believe certain provisions of the draft standard are inconsistent with statistical principles and, therefore, require revision to help avoid having auditors reach inappropriate audit conclusions. Because statistical principles are too complex to explain in detail in an auditing standard, we encourage the JAASB to develop a sampling audit guide that would provide additional guidance on this complex topic. In addition to assisting users, such an audit guide would encourage greater consistency of practice. Alternatively, the standard could refer users to guides and textbooks developed by others, such as the American Institute of Certified Public Accountants (AICPA) guide on audit sampling. Our comments below offer suggestions for improving the following issues discussed in the proposed standard: * Anomalies * Sample design, size and selection of items for testing * Clarifying the role of random selection * Enhancing guidance on value weighted selection * Factors influencing sample size * Sample selection methods

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