Sampling Flashcards
What is the impact of RMM on sample size
What is sampling and non-sampling risk
Sampling: The sample is not repsresentative of the populatino
Non Sampling: The auditor makes an incorect judgement about the sample
What is Alpha risk
Type 1 error risk of incorrect rejection. Population is fine but sample is not (false negative)
What is a Beta risk
Type 2 error risk of incorrect acceptance. Population is not fine but sample is (false positive)
What is attribute sampling?
Testing for a specific attribute
1. Sales order approval
2. Were purchases authorized
3. Count of inventory verification
What is attribute sampling?
Testing for a specific attribute
1. Sales order approval
2. Were purchases authorized
3. Count of inventory verification
What is the 12 step proccess for sampling
13th step is documentation
What happens when the upper deviation rate is higher than the tolerable deviation rate
What is the upper deviation rate
The upper level of a confidence interval estimating total deviations in the population
What is the tolerable deviation rate
The amount of deviation you are willing to accept at the proposed risk level
What is classical variable sampling
Classical variable sampling is used when performing a test of details for substantive testing to determine if individual account balances stated in dollars or other numerical values (Example: units) are materially correct.
When is variable sampling used
Deciding whether the dollar value of an account is reasonable
