Variables Sampling Flashcards
Variables sampling relies heavily on …? (hint: statistical graph)
BELL CURVE
When performing statistical sampling- auditors usually use what method?
Random sampling
T/F: For variable sampling, you cannot use tables, you have to actually calculate the sample size?
True
What are the four factors that an auditor has to consider when performing the calculation for sample size?
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
What is the basic formula for determining the sample size?
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
What is stratification?
Breaking the population into several groups of relatively similar items (small, medium, large items)