Sampling

Selection techniques

this chapter will tell us the

selection techniques that will
help you to detect
misstatement

Example - loan book

Where do we make selection?

While sending confirmation

While selecting item

for existence testing

While selecting sales

transaction for testing

Receirac If
100% testing
A small number of large values
Ze 100 %
60%
crais mess
Cost-effective Confirm
High risk
[00
- 40%
14 cusioners

Specific selection Cusiomet

Lasigead Constant

Items showing certain characteristics slich

-

ABOVE
Items above the specified amount CATEs EDGER
TE
DJ
Sampling
C
Each and every item have a equal chance of selection

Represent
E
=
 *Inherent Risk:*
Inherent risk refers to the susceptibility of an account
balance, transaction, or disclosure to material
misstatement due to factors such as the nature of the Control risk refers to the risk of
material misstatement resulting from
business, industry, or economic conditions, without the failure of controls to prevent an
considering the effectiveness of internal controls. error.
1
*
Audit = Inherent risk X Control risk X Detection risk
risk
Niloss X

In pharmaceutical risk of obsolete

inventory due to expiry dates
In banks provision against advances

Adverse key ratios that will lead to risk

of going concern

Sampling risk Non-sampling risk

Koi item sample Audit he pail diya

mein aaney se reh
jaye
·
Apparitie
TEAM

↑ SiePrice
Sampl: 2 ② Highly
Siz ③ Timely Reviews
Population
SicA :

by
stationately

Issue
-
Issul

Seml/ES
Protect
Population
migee --
boodo =
8 .
4 % Ele =
144s
/

700
/ 7

Fest + 12560- ERRol %

Imple
size 60k + 22401 =

24-/
Fol + 224000 Y
+
125600
1714 600
,

66 844
I

Wittif
-

Tarladie 500000
-Meeting
-
:

Ell -

FITENDED ELCEEDED
woch
Same
massfierig
[ii ↑
 Toc New customes Credit limit Sei ?
Puspesif
TOD Population
- New CREDiT
curmes
Confirmation
InRsArDED
Population : Lisist
DERiseS

New is Greisiness
Population
Sample of sales
warri in

Vick
fuy Testof
Amon D . .
D 31 41

Wi of it
SETAil
of 2
Da 22 42
on Employee
Tax
3 33 Gas
·

Wit of
4 In In
sterly
nu
Free Employee
↑ 15
5% x 50 = 25
.
= 5%
4
& 26 16 46

50
/Aml's Ax
7 21 27
Deduction
Deviation S 20 es
18

Pri
↑ P

↑Aut Gainati
lo
D do D D
I:

US SE HATK DE

Population Pick
Kucht He
-
Millis N Posi Paig
-

Sample Zo ToFAE S
Frie customers

Of IP 1
5% 1 Siritton 15 .
1.
Devittor =

-
Risk? orange y
Zo Riy our Corridols
-
 Tarahi
"Rese

> low

① Kram
ZyAfA
② Protect
TE T
34ADA
Kitt .