Question

Wal-Mart Corporation is the largest retailer in the world, with sales in excess of $370 billion dollars in a recent year. Write the audit program for statistical sampling their Accounts Receivables or Accounts Payables. No data to provide, simply please describe the steps to be followed in the process. Thank you.

Answer 1

Statistical sampling. Sampling means testing less than 100% of the items in the population for some characteristic and then drawing a conclusion about that characteristic for the entire population.

1. Obtain the listing of stores and spares balances at period-end and investigate large or unusual quantities or amounts.           
2. Review large or unusual entries in the ledger account.      
3. Review period end reconciliation of subsidiary and general ledger and investigate large and unusual items.   
4. Attend inventory counts at period end and ensure that physical differences are appropriately recorded and resolved and damaged items if any are identified.     
5. Check valuation of selected items using one or more of the     recommended sampling techniques.   
6. Identify slow moving items and discuss/determine the impact thereof.
7. Investigate any unexpected or unusual movement/differences between current and   prior period as regards the amounts of trade debts, debtor’s turnover, ageing of receivable and ratio of debtors to credit sale etc.