Variables Sampling Flashcards

1
Q

Variables sampling relies heavily on …? (hint: statistical graph)

A

BELL CURVE

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2
Q

When performing statistical sampling- auditors usually use what method?

A

Random sampling

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3
Q

T/F: For variable sampling, you cannot use tables, you have to actually calculate the sample size?

A

True

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4
Q

What are the four factors that an auditor has to consider when performing the calculation for sample size?

A

1) Estimated population standard deviation
2) Tolerable misstatement (precision)- also called the “allowance for sampling risk”
3) Risk of incorrect acceptance (type II)- (1-Confidence Level)
4) Population size- now considered explicitly

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5
Q

What is the basic formula for determining the sample size?

A
n= (S * Z-coefficient * N/A)^2
n= Sample Size 

N= Size of population

S= Estimated population standard devision

Z-Coefficient= level of confidence

A= tolerable misstatement

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6
Q

What is stratification?

A

Breaking the population into several groups of relatively similar items (small, medium, large items)

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