Question

Submit a 700- to 1,050-word document that includes the following: Audit steps for tests of controls, balances, transactions, analytical procedures, etc. as well as other considerations such as sample size and sample methodology.

Answer 1

Answer :

The auditor should obtain knowledge of clients business it is one of the important principles in developing an overall
audit plan. Infact without sufficient knowledge of client’s business, a performing audit is not possible. As per SA-315 on “Identifying and Assessing the Risk of Material Misstatement Through Understanding the Entity and its Environment” states in detail about the significance of such knowledge on the part of the auditor.The auditor needs to obtain a level of knowledge of the client’s business that will enable him to identify events, transactions and practices that, in his judgment, may have significant effect on the financial information. Among other things, the auditor can obtain such knowledge from:
1) The client’s annual reports to shareholders.
2) Minutes of meetings of shareholders, board of directors and important committees.
3) Internal financial management reports for current and
previous periods, including budgets, if any.
4) The previous year’s audit working papers and other relevant
files.

5)Discussions with client.

6) The client’s policy and procedures manual.Relevant publications of the Institute of Chartered Accountants of India and other professional bodies, industry publications, trade journals, magazines, newspapers or text books.
7) Consideration of the state of the economy and its effect on
the client’s business.
8) Visits to the client’s premises and plant facilities.
In addition to the importance of knowledge of the client’s business in establishing the overall audit plan, such knowledge helps
the auditor to identify areas of special audit consideration, to
evaluate the reasonableness both of accounting estimates and management representations, and to make judgments regarding the appropriateness of accounting policies and disclosures.

Further in case of sample size and it's methodology

“Audit Sampling” means the application of audit procedures to less than 100% of items within a population of audit relevance such that all sampling units have a chance of selection in order to provide the auditor with a reasonable basis on which to draw conclusions about the entire population. The objective of the auditor when using audit sampling is to provide a reasonable basis for the auditor to draw conclusions about the population from which the sample is selected.There are many methods of selecting samples. The principal methods are as follows:
(a) Random selection (applied through random number
generators, for example, random number tables).
(b) Systematic selection, in which the number of sampling units
(C) monetering unit sampling

(D) hapazard sampling

(E) Block selection

Thank you hope this helps you

This all of my theoryatical knowledge of my studies