sampling ppt - AuditSampling Slide 9- 1...

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Slide 9- 1 Audit Sampling
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Slide 9- 2 Audit Sampling Defined SAS No. 39 defines audit sampling as the application of an audit procedure to less than 100 percent of the items within an account balance or class of transactions for the purpose of evaluating some characteristic of the balance or class (AU 350.01).
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Slide 9- 3 Advantages of  Statistical Sampling Design efficient samples Measure sufficiency of evidence Objectively evaluate sample results
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Slide 9- 4 Requirements of  Audit Sampling Plans When planning the sample consider: » The relationship of the sample to the relevant audit objective » Materiality or the maximum tolerable misstatement or deviation rate » Allowable sampling risk » Characteristics of the population Select sample items in such a manner that they can be expected to be representative of the population Sample results should be projected to the population Items that cannot be audited should be treated as misstatements or deviations in evaluating the sample results Nature and cause of misstatements or deviations should be evaluated
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Slide 9- 5 Selection of Random Sample Random number tables Random number generators Systematic selection Haphazard Selection Note that these methods are often used in conjunction with a stratification process.
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Slide 9- 6 Terminology Sampling risk » Risk of assessing CR too high / Risk of incorrect rejection » Risk of assessing CR too low / Risk of incorrect acceptance Precision (allowance for sampling risk)
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Slide 9- 7 Types of Statistical  Sampling Plans Attributes sampling » Discovery sampling Classical variables sampling Probability-proportional-to-size sampling
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Slide 9- 8 Attribute Sampling Applied To Tests  Of Controls Attribute sampling is a statistical method used to estimate the proportion of a characteristic in a population. The auditor is normally attempting to determine the operating effectiveness of a control procedure in terms of deviations from the prescribed internal control.
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Slide 9- 9 Sampling Risk for  Tests of Controls Correct Decision Incorrect Decision (Risk of Assessing Control Risk Too High) Incorrect Decision (Risk of Assessing Control Risk Too Low) Correct Decision True State of Population Deviation Rate Deviation Rate
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This note was uploaded on 05/23/2011 for the course ACCT 842 taught by Professor Shekib during the Spring '11 term at Governors State University.

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sampling ppt - AuditSampling Slide 9- 1...

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