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sampling
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Terms in this set (8)
methods for selecting items for testing
1. selecting all items
2. selecting specific items
3. audit sampling
selecting all items in an account or all occurrences of a control may be done when
- the population consists of a small number of high dollar value items
- audit procedures can be automated and applied to the entire population
- audit procedure is designed to respond to significant risk
- other means of selecting items for testing do not provide sufficient appropriate audit evidence
selecting specific items
- refers to testing of all items in a population that have a specific characteristic or testing all items over a certain amount
- when specific items are selected for testing the results of the audit procedure cannot be projected to the population
audit sampling
- application of an audit procedure to less than 100% of the items in the account balance or transaction class in order to evaluate some characteristic of the balance or class
- audit sampling useful when auditor has no special knowledge about likely misstatements contained in account balance/transaction class
sampling risk
the risk that the sample is not representative of the population
sampling methods
1. statistical sampling
2. non statistical sampling
both approaches require the use of professional judgement to some extent, both are GAAS and both involve sampling risk
statistical sampling
- auditors specify the sampling risk they are willing to accept and then calculate the sample size that provides that degree of reliability
- uses probability to choose most efficient sample size
- measures the sufficiency of evidence obtained
- evaluate results quantitatively and quantified sampling risk
non statistical sampling
- sample size is not determined mathematically
- auditors use their judgement in determining sample size and sample results are evaluated using auditor judgement
- does not employ probability
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