## Selecting Specific Items

When an auditor decides not to use statistical sampling and instead selects specific items, the selection is not random — it is risk-driven and judgement-based.

### Factors the Auditor Considers

Understanding of the entity
Characteristics of the population being tested
Assessed Risk of Material Misstatement (ROMM)

### Categories of Specific Items Selected

#### A) High Value or Key Items

Selected because of:

High monetary value, OR
Unusual or suspicious characteristics (e.g., round-number transactions, transactions with related parties)

#### B) All Items Over a Certain Amount

A threshold is set; every item above that threshold is tested without exception.

#### C) Items to Obtain Information

Selected to gather information about:

Nature of the entity (business model, operations)
Nature of transactions (unusual terms, new transaction types)

### Important Caveat

Selecting specific items does not provide audit evidence about the remainder of the population. The auditor cannot extrapolate conclusions to untested items.

Worked example

### Example 1

Example — High Value Items: An auditor is testing trade receivables with a total balance of ₹5 crore. The auditor decides to specifically select all individual balances above ₹10 lakh (covering 70% of the total value) because these high-value items individually pose greater misstatement risk.

### Example 2

Example — Unusual Characteristics: During a bank audit, the auditor notices several journal entries posted at 11:58 PM on the last day of the financial year. These are selected as specific items because the timing is suspicious and could indicate window-dressing.

### Example 3

Example — All Items Over Threshold: An auditor sets a threshold of ₹5 lakh for capital expenditure items and selects ALL items above that threshold for testing — regardless of any other risk factor.

⚠️ Common exam mistakes

Confusing specific item selection with statistical sampling — specific item selection does NOT allow extrapolation to the full population.
Forgetting that the remaining (unselected) population still carries unaddressed risk — the auditor must consider whether additional procedures are needed for those items.
Not documenting the rationale for why specific items were chosen — the basis (high value, unusual nature, etc.) must be recorded.

Reference:

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Selecting Specific Items in Audit Testing

Worked example

⚠️ Common exam mistakes