Audit Sampling Flashcards
Define sampling:
Application of an audit procedures to evaluate less than 100% of a population for a BALANCE or CLASS
What are the two types of sampling?
Non-Statistical sampling
Statistical sampling
What is another name or phrase for non-statistical sampling?
Judgemental sampling
What are the benefits of statistical sampling?
It helps you quantify the size of the sample which still involves judgements
It makes judgements explicit
The focus is measurement (or quantifying)
What is attribute sampling?
Test of controls (related to assessment of control risk)
What is variable sampling?
Substantive procedures- trying to determine a populations dollar value
- Difference estimation
- Ratio estimation
- Mean-per-unit estimation
- Probability-proportionate-to-size (PPS) sampling
What is the risk of sampling?
That the sample may not be representative of the population
What is a type I error (false rejection)?
Risk of under-reliance on internal control
Risk of incorrect of dollar balance
What are type II errors (false acceptance)
The risk of over-reliance on internal controls
The risk of incorrect acceptance
What is a non-sampling risk?
Any mistake made bythe auditor other than having a sample that is not representative of the population
- Inappropriate auditing procedures
- Failure to correctly identify errors or amounts sampled
