Audit Tests

Determining Probability of
Effectiveness of Audit Tests

Audit Tests. Based upon your professional judgment, estimate the probability of the effectiveness of your audit tests. Example:

1. Effectiveness of controls expected by the auditor = .7

2. Conversely, ineffective controls = .3

3. Probability audit tests will confirm controls are effective = .6

4. Conversely, probability controls will not disclose effectiveness of controls = .4

5. Probability audit tests will disclose ineffective controls = .4

6. Therefore, probability tests will confirm ineffective controls = .6

Correct Decision. Likelihood of correct decision - controls are effective - resulting from audit tests designed (= .54):

Effectiveness of controls expected (.7)
times
Probability audit tests will confirm controls are effective (.6)

Plus

Ineffectiveness of controls (.3)
times
Probability controls will not disclose effectiveness of controls (.4)