An auditor plans to examine a sample of 20 checks for counter signatures as prescribed by the client's control procedures.One of the checks in the chosen sample of 20 cannot be found.The auditor should consider the reasons for this limitation and:
A)Evaluate the results as if the sample size had been 19.
B)Treat the missing check as a deviation for the purpose of evaluating the sample.
C)Treat the missing check in the same manner as the majority of the other 19 checks,i.e. ,countersigned or not.
D)Choose another check to replace the missing check in the sample.

Question

Quizplus · Accepted Answer

Treat the missing check as a deviation for the purpose of evaluating the sample is the correct approach because it reflects a potential weakness in the client's internal control system. The inability to locate a check could indicate issues such as poor record-keeping or even fraud, which are relevant concerns for an auditor assessing control risk.

An Auditor Plans to Examine a Sample of 20 Checks