Sampling

Question 1

What is sampling?

Answer 1

Quantitative methods used to ensure the gathering of sufficient and reliable evidence. When performing engagement procedures

Testing a selected number of items/tx from a population

Question 2

What is statistical sampling?

Answer 2

Allows calulation of sample reliability and risk of reliance

Premits optimisation of sample size

Sample findings can be projected to the population with reliability

Question 3

What is non-sampling?

Answer 3

No quantified measures of risk of reliance

Non-probabilistic sampling

Judgemental sampling

Question 4

Representive sample

Answer 4

Characteristics in the sample approximately the same as the population

Conclusion the same as if the auditor tested or audited the whole population

Question 5

Sampling risk

Answer 5

Absolute certainty that the sample will be representative =not possible

Conclusion based on the sample may differ from that of the population

The risk that the results of the sample differ from the results that would have been obtained if the total population was audited

Expressed as a %

Question 6

How do we control sampling risk?

Answer 6

Increase the sample size

Use the appropriate method for the selection of items from the population

Question 7

Non-sampling risk

Answer 7

The risk that the auditor will not uncover and record existing exeptions in the sample

No connection with the fact that sampling was used

Question 8

How do we control non-sampling risk?

Answer 8

Careful design of the audit procedures

Proper an thorough performing of engagement procedures

Proper supervision

Question 9

Stratification

Answer 9

Process of dividing population into sub-populations representing a group of sampling units which have similar charateristics

Question 10

Measures of location

Answer 10

Representative value of data :

Mean

Median

Mode

Question 11

Measures variability

Answer 11

Variation around the mean value

Range: from lowest to highest

Varaince : variation about the mean value in the population

Question 12

Confidence and precision

Answer 12

Degree of belief

Question 13

Interpolation

Answer 13

Adjustment to values to a more precise estimate

Question 14

Steps in the sampling process (7)

Answer 14

1. Determine engagement objectives 
2- determine population
3- determine sample unit 
4-determine sample size 
5-determine which items must be tested
6- test the sample items 
7-evaluate results and draw a conclusion

Question 15

Where dies sampling fit in?

Answer 15

Performing the engagement

- gather sufficient, relevant ,reliable and useful evidence