Acc491 Wk 4 Dq Questions

*What are some of the different types of sampling methods that are available to the auditor? * How does the auditor decide which method to use? How will the different methods affect the audit? The types of auditing samples are broken down into two different categories: statistical and non-statistical sampling. The purpose of auditing samples are designed to give the auditor the results he or she seeks, without having to completely audit 100% of the items within the audit population.
Here are some of the different types of auditing samples broken out into the two categories: Statistical Sampling Methods: Random Sampling – Is an auditing method that basically means that all sampling units in the auditing population will have an equal chance of being selected for evaluation, or that no bias would have played a role in what was selected. It is also important the samples that have been selected are not able to re-sampled again.
Systematic Sampling – Involves selecting sampling units using fixed intervals between selections, the first interval having a random start. This method is often referred to as interval sampling. This is because this method is where the auditor will take the number of sampling units in a population and divides this into the sample size to give a sampling interval. For example, if an auditor is auditing sales invoice where the sampling interval is 20, the auditor will determine a starting point for sampling and sample every 20th sales invoice thereafter.

Non-Statistical Sampling Methods: {text:list-item} {text:list-item} What is the importance of defining the population when performing audit procedures? How will this affect the sample size? How will incorrectly defining the population affect the sampling unit? The auditing population is the whole set of data for auditors to test in order to reach their final auditing conclusion. Auditors need to determine a population in which to examine samples from for specific auditing objectives he or she wishes to complete.
For example, if an auditors’ goal was to test for overstatements of debtors, the auditing population could entail listing of debtors. However, if the auditor was to testing for overstatements of creditors, then the population would not be only be a listing of creditors, but, also require the auditor to look for subsequent disbursements, unpaid invoices, suppliers’ statements, unmatched receiving reports, or other auditable populations that would provide evidence of potential understatements to creditors.
When the auditor is designing the auditing samples, the auditor should consider the specific audit objectives he or she wishes to fulfill, the nature of the auditing population for which they wish to sample, as well as any other factors affecting the auditing samples size. The determination of an auditing samples size should require judgment of: Assurance required Tolerable and Expected Error (or Deviation Rate) Stratification Erroneously defining the auditing population can have an incredible affect on sample size as the auditor then has to choose a sample for conducting the audit.
Auditors should select sample size in a way that the auditing sample can be anticipated to be a fair representative of the overall auditing population in respect of the uniqueness that is tested. If an auditing population has not been defined then the chance for errors increases the indistinctness of the results taken from the auditing sampling. Furthermore, if an auditing population itself has incorrectly been defined, the sampling unit will not give the anticipated results. These errors can formulate an incorrect conclusion by the auditor, there by defeating the initial purpose of the audit.