{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

lecture_10 4240

# lecture_10 4240 - ACCT 4240 Auditing Introduction to Audit...

This preview shows pages 1–11. Sign up to view the full content.

ACCT 4240: Auditing Introduction to Audit Sampling

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Definitions Sampling is the examination of less than 100% of the population for the purpose of evaluation some aspect of the population Each item in the population is a population unit Each population unit selected for examination is a sampling unit
Obtaining information about a lot from a little Used in everyday life Need to understand principles Use when they fit objectives Identify population (universe, field) Base opinions only on what is sampled Nothing in sampling is precise Confidence level Precision

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Inclusions and Exclusions A 100% audit does not involve sampling Analytical procedures normally are not applied to samples Procedures usually involved with sampling include Recalculation Physical observation of inventory Confirmations Document examination
Projecting the Error in the Sample to the Population Book value of the population………… \$1,500,000 Book value of the sample……………… \$1,000,000 Dollar amount of error in the sample…… \$10,000 Projected Error = \$15,000 × 000 , 000 , 1 000 , 500 , 1 000 , 10 \$

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Statistical Sampling Uses the laws of probability for selecting and evaluating the sample items Selected at random so each population unit has an equal chance of being selected Statistical calculations are used for selecting sample units and evaluating audit results Sample size determines the level of confidence in the results
Nonstatistical Sampling Results are evaluated judgmentally rather than statistically Sample selection can be random or nonrandom Block sampling Select a group of items in sequence Sample may not be representative of the population Haphazard sampling - may introduce bias Judgmental sampling - sample size and items selected depends on auditor judgment

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Sample Selection: Random vs. Haphazard Selection Biased samples (nonstatistical): Purposeful Deliberate exclusions Patterns in population Statistical: Random sample selection Interval sampling Cluster sampling Stratified sampling Example When to stratify
Sampling Risk and Non- Sampling Risk Sampling risk is the risk that the sample is not representative of the population Non-sampling risk results from human error Failure to recognize a mistake Use of an ineffective audit procedure Non-sampling risk is not quantifiable Level is reduced through Adequate supervision Quality control standards

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Techniques Sampling Technique Type of Test Purpose Attribute sampling Variables sampling Test of controls Substantive test To estimate the rate of deviations from prescribed controls in a population. To estimate the total dollar amount of a
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 42

lecture_10 4240 - ACCT 4240 Auditing Introduction to Audit...

This preview shows document pages 1 - 11. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online