Explain how the audit team will select the number of sales

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Question - Case - A public limited company requires external auditors to provide assurance to their shareholders on the financial statements drafted for the year 2019. The audit team performed some audit procedures including assessment of entity's internal control system of sales and purchases to assess risk of material misstatements.

Assuming the auditors have successfully completed assessment of risk of material misstatements, followed by their materially planning, auditors are now planning for designing and performing an appropriate audit procedures to collect various evidences for the assertions.

The auditor Mr. X is assigned to audit sales revenue of the entity. He is given 3 days to complete the audit of the assertions related to sales revenue and draw an appropriate audit conclusion about the assertion.

Mr. X realized that the client entity has 5,000 customers account with Nu. 789.5 million sales for the year.

Explain how the audit team will select the number of sales transactions or customers account that will be tested to obtain the reasonable assurance that sales revenue is not materially misstated.

Reference no: EM133174030

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