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Audit Sampling Techniques Explained

Audit sampling is essential for auditors to draw accurate conclusions from a subset of data. It involves understanding sampling risk, which can lead to erroneous conclusions affecting audit effectiveness and efficiency. Proper sample design, size, and selection are crucial to minimize sampling risk and ensure reliable audit results.

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6 views13 pages

Audit Sampling Techniques Explained

Audit sampling is essential for auditors to draw accurate conclusions from a subset of data. It involves understanding sampling risk, which can lead to erroneous conclusions affecting audit effectiveness and efficiency. Proper sample design, size, and selection are crucial to minimize sampling risk and ensure reliable audit results.

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cafinal.vk
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© All Rights Reserved
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SA 505

Friday, 17 May 2019


7:15 PM
SA 530 AUDIT SAMPLING
Audit sampling is to provide a reasonable basis for the auditor to
draw conclusions.

Imp Question For Exam Answer


Sampling risk?
The risk that the auditor’s conclusion based on a sample may be
different from the conclusion if the entire population were subjected to
the same audit procedure. Sampling risk can lead to two types of
erroneous conclusions:
1- In the case of a test of controls, that controls are more effective
than they actually are, or in the case of a test of details, that a
material misstatement does not exist when in fact it does. The
auditor is primarily concerned with this type of erroneous conclusion
because it affects audit effectiveness and is more likely to lead to an
inappropriate audit opinion.
2- In the case of a test of controls, that controls are less effective
than they actually are, or in the case of a test of details, that a material
misstatement exists when in fact it does not. This type of erroneous
conclusion affects audit efficiency as it would usually lead to
additional work to establish that initial conclusions were
incorrect.

SAMPLE DESIGN, SIZE Sample Design


& SELECTION OF ITEM When designing an audit sample, the auditor's consideration includes the
OF SAMPLING specific purpose to be achieved and the combination of audit procedures that
is likely to best achieve that purpose.

In considering the characteristics of the population from which the sample


will be drawn, the auditor may determine that stratification or value-weighted
selection is appropriate.

Sample Size
The level of sampling risk that the auditor is willing to accept affects the
sample size required. The lower the risk the auditor is willing to accept, the
greater the sample size will need to be.
After this write the factors affecting Size of Samples,
Example - Risk , Materiality , Expected Error , Tolerable Error etc.

Selection of Item for Testing


The auditor shall determine a sample size sufficient to reduce sampling risk
to an acceptably low level. The auditor shall select items for the sample in
such a way that each sampling unit in the population has a chance of
selection.
Method for Selection Refer Book Direct Question
Quality Aspects while  Evaluate the result of Samples and effect on other areas of Audit.
considering error in  Look for the common nature to evaluate the reason of mis statement.
sample  Consider Risk of Fraud

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