Audit Sampling
Audit sampling is the application of audit procedures to less than 100% of items within a population, allowing the auditor to draw conclusions about the entire population.
Explanation
Sampling can be statistical (uses probability theory to measure sampling risk) or nonstatistical (relies on auditor judgment). For tests of controls, attribute sampling is used to estimate the deviation rate. For substantive testing, variables sampling (e.g., mean-per-unit, difference, ratio estimation) estimates monetary misstatement. Sampling risk is the risk that the sample is not representative of the population. Nonsampling risk includes all other risks, such as using inappropriate procedures.
Key Points
- •Statistical sampling allows quantification of sampling risk; nonstatistical does not
- •Attribute sampling for tests of controls; variables sampling for substantive tests
- •Sampling risk decreases as sample size increases
Exam Tip
Know the difference between sampling risk and nonsampling risk — and that increasing sample size reduces sampling risk but not nonsampling risk.
Frequently Asked Questions
Related Topics
Audit Evidence
Audit evidence is all information used by the auditor to arrive at the conclusions on which the audit opinion is based, evaluated for sufficiency (quantity) and appropriateness (quality).
Substantive Procedures
Substantive procedures are audit procedures designed to detect material misstatements at the assertion level, including tests of details and substantive analytical procedures.
Test your knowledge
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