Home › CA Final › auditing › Special Aspects of Auditing in an Automated Environment › Under SA 530, when an automated environment prod…
Under SA 530, when an automated environment produces a population that is too large to sample non-statistically, the auditor should:
AExamine 100% of items regardless of cost
BApply CAATs to test the entire population for the relevant attribute
CAvoid sampling and report a scope limitation
DReduce materiality to compensate
Answer & Solution
Correct answer: C. Avoid sampling and report a scope limitation
1. CAATs handle large populations without statistical sampling overhead.
2. They can apply a defined rule (e.g. value > threshold or duplicate-supplier check) to every record.
3. Lowering materiality or claiming a scope limitation is not justified when CAATs are feasible.
_Source: ICAI BoS CA Final Paper 3, Ch 4 "Special Aspects of Auditing in an Automated Environment"_
Related questions
When evaluating an "Information Produced by the Entity" (IPE) report used as audit evidencA "single ID with admin privileges shared across the IT operations team" is a classic violA robotic process automation (RPA) bot performs three-way matching of PO/GRN/Invoice in thIn data-driven audit, the False-Positive Rate of an exception flag is HIGH. The auditor's Which of the following findings would most likely indicate a Material Weakness in IT generWhich is the BEST control to detect ghost employees in an automated payroll system?A cloud-based accounting application is hosted by a third-party SaaS provider. Under SA 40For Big Data analytics on the audit of a bank's loan portfolio, the MOST informative analy