Audit Sampling

TOC and STOT Chapter 13

TODB Chapter 15
Representative Samples

Non Sampling Risk

Human Error
Audit Procedure

Sampling Risk
Sample Size
Selection of Sample
 Phases of Sampling

1. Plan the Sample

2. Select the Sample and Perform the

Test

3. Evaluate Result
 Method of Sampling

Statistical VS Non Statistical

Probabilistic VS Non Probabilistic

Non Probabilistic Method

Directed Sample Selection

Block Sample

Hap hazard Sample Selection

 Probabilistic Method

Simple Random sample Selection

Systematic Sample Selection
Probability Proportional to Size Sample
Selection
Stratified Sample Selection
Sampling for Exception Rates

Deviation from Controls

Monetary Mis Statement

In Population of Transactions
In Population of Account Balance
Detail
Phases of Non Statistical Audit
Sampling
Plan the Sample
Objective of the Audit Test
Decide Whether Audit Sampling
Applies
Define Attributes and Exceptions
Define Population
Define Sampling Unit
Specify Tolerable Exception Rate
Specify Acceptable Risk
Estimate the Population Exception Rate
Determine the Initial Sample Size
 Phases of Non Statistical Audit
Sampling Contd

Select the Sample and Perform the Audit

Procedure
Select the Sample
Perform the Audit Procedure

Evaluate Result
Generalize from the Sample to the Population
Analyze Exception
Decide the Acceptability of the Population
 Initial Sample Size

Population Size
Tolerable Exception Rate (TER)
Acceptable Risk of Assessing Control Risk
(ARACR)
Estimated Population Exception Rate (EPER)
Generalized from the Sample to
Population

Sample Exception Rate (SER)

Computed Upper Exception Rate (CUER)
Estimate of Sampling Error + SER
Calculated Sampling Error (TER SER)
SER > EPER Unacceptably High Risk
Figure 13 4 Sampling Data Sheet: Test of PT Perkakas Primas Function

Planned Audit Actual Results

Initial Sample Number of Sample Calculated

Description of Attributes
Exceptions Sampling
EPER TER ARACR Sample
Size Exception Error
Size
Rate (TER - SER)

0 4 Low 75 75 0 0 4.0

1.

2. 1 5 Low 100 100 2 2 3.0

3.

1 5 Low 100 100 0 0 5.0

 When TER SER is Too Small or
SER > TER

Revise TER or ARACS

Expand Sample Size
Communicate with Audit Committee or
Management
 Statistical Attributes Sampling Initial Sample Size

Table 13 8 Determining Sample Size for Attributes Sampling

5PERCENTARACR

Estimated

Population
Exception TolerableExceptionRate(inPercent)
Rate(in
4 5 6 7 8 20
Percent)
0.00 74 59 49 42 36 14
0.25 117 93 78 66 58 22
0.50 117 93 78 66 58 22
0.75 117 93 78 66 58 22
1.00 156 93 78 66 58 22
1.25 156 124 78 66 58 22
1.50 192 124 103 66 58 22
1.75 227 153 103 88 77 22
2.00 * 181 127 88 77 22
2.25 * 208 127 88 77 22
2.50 * * 150 109 77 22
2.75 * * 173 109 95 22
3.00 * * 195 129 95 22
3.25 * * * 148 112 22
3.50 * * * 169 112 22
3.75 * * * 185 129 22
4.00 * * * * 146 22
5.00 * * * * * 30
6.00 * * * * * 30
7.00 * * * * * 37

Statistical Attributes Sampling Initial Sample Size
Contd

Factors Affecting
ARACR 5%
TER 7%
EPER 1%
Sample Size : 66
Effect of Population : Minor in Attributes
 Evaluate Result Generalize the Sample
Table 13 9 Evaluating Sample Result Using Attributes Sampling

5PERCENTARACR

ActualnumberofExceptionsFound
0 1 2 3

SampleSize
25 11.3 17.6 * *
30 9.5 14.9 19.6 *
35 8.3 12.9 17.0 *
40 7.3 11.4 15.0 18.3
45 6.5 10.2 14.4 16.4
50 5.9 9.2 12.1 14.8
55 5.4 8.4 11.1 13.5
60 4.9 7.7 10.2 12.5
65 4.6 7.1 9.4 11.5
70 4.2 6.6 8.8 10.8
75 4.0 6.2 8.2 10.1
80 3.7 5.8 7.7 9.5
90 3.3 5.2 6.9 8.4
95 3.0 4.7 6.2 7.6
Evaluate Result Generalize the Sample Contd

Factors Affecting
ARACR 5%
Sampling Error 1 Out of 70 1%
CUER 6.6%
 Evaluate Result Acceptability of Population

CUER TER Acceptable

Figure 13 8 Attributes Sampling Data Sheet: Test of PT Perkakas Primas
Function

Planned Audit Actual Results

Number
Description of Initial Sample of Sample
Attributes Exception
EPER TER ARACR Sample s
Size Exception CUER
Size
Rate

0 4 Low 75 75 0 0 4.0

1.

2. 1 5 Low 100 100 2 2 6.2

3.