When performing tests of details to such balance sheet components as trade accounts receivable and inventories, an alternative approach to MUS is classical variable sampling. Classical variable sampling(CVS) is reach a conclusion in monetary amounts(o...
When performing tests of details to such balance sheet components as trade accounts receivable and inventories, an alternative approach to MUS is classical variable sampling. Classical variable sampling(CVS) is reach a conclusion in monetary amounts(or possibly in units). This method is effective for both overstatements and understatements. It is most appropriate for populations that contain a moderate to high rate of misstatements.
This paper provided 8 steps to applying CVS & examples illustrating the application of CVS. Various auditing textbooks have not agreed on the approach for the determining the sample size equation & evaluating sample results.
Discussion on this paper focuses on the 2 steps (ie, sample size equation & evaluating sample results.) that apply to CVS. A detailed example is included to demonstrate the differences among auditing textbooks in the application of CVS.
It is hoped that the explantanations on the CVS could be a help to the lecturers on auditing in university class.