Audit Sampling
What is Audit Sampling?
The application of audit procedures to less than
100% of items within a population of audit
relevance such that all sampling units have a
chance of selection in order to provide the auditor
with a reasonable basis on which to draw
conclusions about the entire population.
Purpose of audit sampling?
Gather enough evidence to conclude an audit
opinion
Reduce the number of resources used
Provide the basis for auditors to issue a
conclusive audit opinion
Detect any errors or fraud that can occur
Provethat auditors have completed the audit fully
in accordance with auditing standards
Used as a tool for investigating
Sampling methods
1. Statistical audit sampling
2. Non-statistical audit sampling
• Judgmental
• Block selection
Statistical audit sampling methods
Pareto Method ( 80/20 rule)
• 80% of effects come from 20% of causes
• (e.g., 20% of customers produce 80% of the
revenue)
Statistical audit sampling methods
Pareto Method ( 80/20 rule)
Statistical audit sampling methods
Stratified Sampling
• Stratified sampling is a method of sampling
from a population which can be partitioned
into subpopulations.
Statistical audit sampling methods
Systematic sampling
• Chooses the samples after a specifically
defined interval
• (e.g. Every 3rd Invoice in the population)
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Statistical audit sampling methods
Cluster Sampling
• Divided total population into clusters/groups
and randomly select the sample clusters for
further verification.
Statistical audit sampling methods
Monetary Unit Sampling
• Monetary unit sampling (MUS) is a statistical
sampling method that is used to determine if
the account balances or monetary amounts in
a population contain any misstatements. Each
individual dollar in the population is considered
a sampling unit, so that account balances or
amounts in the population with a higher value
have a proportionally higher chance of being
selected.
Question 1
To check the Asset acquisition documents, auditor
decided to divided assets list into groups based on
the type of the asset. And then select a sample of
assets up to MVR 100,000 from each group.
- Stratified Sampling
Question 2
If the selected starting point was 20, the 70th
person on the list would be chosen followed by the
120th, and so on. Once the end of the list was
reached and if additional participants are required,
the count loops to the beginning of the list to finish
the count.
- Systematic Sampling
Question 3
Auditor obtained a file with a list of the invoices
numbered from 1 to 3,750. He uses a random
number generator to select 25 numbers between 1
and 3,750. He selects the corresponding invoices
for her sample.
- Simple Random Sampling
Question 4
Auditor obtained a file with a list of the invoices
numbered from 1 to 3,750. He uses a random
number generator to select 25 numbers between 1
and 3,750. He selects the corresponding invoices
for her sample.
- Simple Random Sampling
Question 5
Auditor organizes the invoices by the hospital
department that submitted them (pediatrics,
surgery, laboratory, etc.), There are 6 departments
in the hospital, and he randomly selects 5 invoices
from each department.
- Stratified sampling
How can we decide the size of the
sample?