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Audit Sampling Size and Confidence Factors

For large populations, the sample size formula uses the standard normal distribution value (Z), standard deviation (σ), and desired margin of error (E). Acceptable evidence levels are roughly 68% (1 sigma), 80%, and 90-95% (2 sigma). For small populations, a good maximum sample size is usually 10% but should not exceed 1000. Factors like confidence level, expected variance, desired precision determine sample size. Audit sampling involves both statistical and non-statistical methods. Resources on audit sampling provide guidance on techniques, tables, and applying sampling in audits.

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johnson lee
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14 views2 pages

Audit Sampling Size and Confidence Factors

For large populations, the sample size formula uses the standard normal distribution value (Z), standard deviation (σ), and desired margin of error (E). Acceptable evidence levels are roughly 68% (1 sigma), 80%, and 90-95% (2 sigma). For small populations, a good maximum sample size is usually 10% but should not exceed 1000. Factors like confidence level, expected variance, desired precision determine sample size. Audit sampling involves both statistical and non-statistical methods. Resources on audit sampling provide guidance on techniques, tables, and applying sampling in audits.

Uploaded by

johnson lee
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

AB test basis:

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For a large population, calculate using the formula


where Z is the value from the standard normal distribution reflecting the confidence level
that will be used (e.g., Z = 1.96 for 95%), 
σ is the standard deviation of the outcome variable and 
E is the desired margin of error.  

The levels of evidence low, moderate, and high translate to roughly 68%(1sigma),
around 80%, and 90-95%(2 sigma)  
eg. 2 sigma 95% evidence, acceptable error rate: 2/115=0.017 = 1.7%, sample size =
115, more than 2 error then reject.
1 sigma, accepte error 3%, sample size =65

For small population, 


A good maximum sample size is usually 10% as long as it does not exceed 1000  

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more to check:
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johnson plum <[Link]@[Link]> Tue, Jan


12, 2021,
10:32 AM
to Joanna

Audit Sampling: Sampling and Non-


Sampling Risk CPA Exam
[Link]
v=KMXZvdO_AWU&list=PLxP0KZzCGFYO2TXSQO7GuEvEJEV3G7b-3&index=1

Attachments area
Preview YouTube video Audit Sampling: Sampling and Non-Sampling Risk
CPA Exam
Audit Sampling: Sampling and Non-Sampling Risk CPA Exam

audit book and charts, tables to download  :


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OPL#:~:text=Introduces%20statistical%20and%20nonstatistical%20sampling,%2C
%20in%20real%2Dworld%20situations.&text=Do%20you%20have%20an%20AICPA
%20membership%3F
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Articles_2008/CPA/Sept/[Link]
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article=[Link]&context=libpubs
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