Chap009 (1) - Chapter 09 Audit Sampling CHAPTER 9 Audit...

This preview shows page 1 - 3 out of 35 pages.

Chapter 09 - Audit Sampling CHAPTER 9 Audit Sampling Review Questions 9-1 Nonstatistical sampling is an audit sampling technique in which the risk of sampling error is estimated by the auditors using professional judgment rather than by the laws of probability. Statistical sampling involves the quantification of the risk of sampling error through the use of mathematics and laws of probability. 9-2 Sampling risk is the possibility that the auditors will make an erroneous decision based on a sample result. To control sampling risk the auditors increase the size of their samples. Nonsampling risk is the risk of erroneous conclusions by the auditors based on any factor other then sampling. For example, the auditors may perform inappropriate tests, or they may not recognize errors in the sample items examined. Nonsampling risk may be controlled by adequate planning and supervision of engagements, and the establishment of effective quality control policies and procedures. 9-3 The physical representation of the actual population is the recorded value that represents the population. For example, if the auditors use a computer printout of recorded accounts payable from which to sample, they must attempt to determine that it properly includes all accounts payable. 9-4 All three of the methods of selecting items for examination (random number table selection, systematic selection, random number generator selection) will produce a random sample if properly applied. However, when using systematic sampling on a population that is not in random order it may be necessary to stratify the population into segments, or to use a relatively large number of starting points to produce a random sample. 9-1
Image of page 1

Subscribe to view the full document.

Chapter 09 - Audit Sampling 9-5 "Systematic selection" in auditing means drawing every nth item from the population of items to be sampled. For example, the auditors might draw every tenth check from a file of paid checks. To help insure a random sample, the auditors should ascertain that the population is in random sequence, and is not, for example, classified by size of check. If the population is not in random order, the auditors may be able to stratify it into segments, each of which is in random order. They may also guard against a nonrandom sample by using several random starting points. Systematic selection is easily applied to unnumbered documents merely by counting off the sampling interval between documents to be selected. 9-6 Sampling without replacement means that once an item is drawn for inclusion in a sample, it is not replaced into the population prior to drawing the remaining items. Therefore, one item cannot be included more than once in a given sample. Sampling with replacement means that selected items are replaced into the population prior to drawing the next item. Under this method, it is possible for one item in the population to be drawn several times, thus representing several sample items in a given sample.
Image of page 2
Image of page 3
  • Spring '12
  • W
  • deviation rate

{[ snackBarMessage ]}

Get FREE access by uploading your study materials

Upload your study materials now and get free access to over 25 million documents.

Upload now for FREE access Or pay now for instant access
Christopher Reinemann
"Before using Course Hero my grade was at 78%. By the end of the semester my grade was at 90%. I could not have done it without all the class material I found."
— Christopher R., University of Rhode Island '15, Course Hero Intern

Ask a question for free

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern