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Audit ch10 slides - Chapter 10 Audit Sampling Introduction...

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Chapter 10 Audit Sampling
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Slide 2 Introduction to Audit Sampling Audit sampling is: – The application of an audit procedure to less than 100 percent of the items within an account balance population or class of transactions. – For the purpose of evaluating some characteristic of the balance or class.
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Slide 3 Risk and Materiality Risk and materiality form the basis for determining the extent of procedures to be undertaken.
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Slide 4 Kinds of Audit Programs Internal control programs obtain evidence about control objectives. – Sample…. .. Balance audit programs obtain evidence about financial statement assertions. – Sample…
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Slide 5 Inclusions and Exclusions Related to Audit Sampling Sampling involves looking at part of a population in order to reach a conclusion on the entire population.
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Slide 6 Why Auditors Sample Auditors utilize audit sampling when:
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Slide 7 Statistical Sampling Auditors define statistical sampling as audit sampling that uses the laws of probability for selecting and evaluating a sample for the purpose of reaching a conclusion about the population. 2 criteria - -
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Slide 8 Statistical Sampling Random sample: – Each population item has an equal likelihood of being selected in the sample. – A random sample is required for statistical sampling.
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Slide 9 Statistical Sampling Statistical methods can be used to generate the preliminary estimate of sample size. – A calculation of sample size is not required for a method to be considered statistical sampling.
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Slide 10 Nonstatistical (Judgmental) Sampling Non-statistical sampling is….
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Sampling and Non-Sampling Risk Sampling risk: – The probability that an auditor’s conclusion based on a sample might be different from the conclusion based on an audit of the entire population. • Alpha risk-
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Audit ch10 slides - Chapter 10 Audit Sampling Introduction...

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