Indah Widanigrum (31672)

Janko Eka Tantra (32691)

Rizal Fahmi (31680)
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The Lakeside Company:

Auditing Cases
Sampling For Attributes

Case 11
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1. Sampel statistic mensyaratkan auditor untuk sebelumnya menetapkan parameter resiko
sebelum dimulai prosedur pengujian. Dengan demikian tingkat jaminan yang diinginkan
(dan tingkat resiko yang dapat diterima) selalu ditentukan setiap kali konsep statistic dan
formula matematika digunakan. Auditor sadar akan terdapat kemungkinan kesalahan dalam
membuat kesimpulan. Informasi seperti ini penting jika KAP harus membenarkan
pemeriksakan yang dilakukan dan opini yang diberikan. Akan tetapi
1. (1)
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Statistical sampling requires the auditor to establish risk parameters prior to the
start of a testing procedure. Thus, a desired level of assurance (and, conversely,
an acceptable level of risk) is always defined whenever statistical concepts and
mathematical formulas are to be utilized. The auditor is aware in advance of the
possibility of a mistaken conclusion. Such information is especially important if the
audit firm ever has to justify its examination and the opinion rendered. However,
application of statistical sampling does demand a specialized degree of
knowledge. The auditor must have an adequate understanding of statistical
methodology. In addition, developing a statistical sampling plan may require a
significant amount of audit time.

Judgmental sampling is many times easier and quicker to apply and is, thus,
especially appealing in audit areas where exact precision is not required. For the
auditor with sufficient experience, this type of sampling can frequently provide
satisfactory conclusions about much of the client's data. Unfortunately, since no
guidelines exist for key decisions such as acceptable risk levels, required sample
size, or the evaluation of final results, the auditor has no way of measuring the
potential for an incorrect assessment. In any test, not enough items may have been
examined to support a conclusion, or too much testing could occur creating an
inefficient audit. Furthermore, if the auditor must ever demonstrate in a peer review
or court case the basis for a particular decision, objective evidence to substantiate
the judgment is usually not available.

There is no correlation between sample size and choice of statistical versus

judgmental sampling methods.
(2)

As the partner-in-charge of the Lakeside examination, Cline must ensure that

sufficient, competent evidence has been obtained to satisfy himself that the client's
figures are fairly presented. Based on his years of audit experience, if Cline is
uncomfortable with the evidence accumulated to date, he is obligated to seek
additional assurance. No other individual has the responsibility; no one else can
specify the appropriate amount of evidence required in a particular situation.
Because the decision is a judgment, some auditors might agree with Mitchell that
the testing presented in Exhibit 11-2 is sufficient. However, Cline is
in charge of this audit, and he should never accept a client figure until personally
satisfied of its fair presentation.

(3)

Although based on mathematical concepts, statistical sampling relies heavily on

the auditor's professional judgment. Such judgments can be seen throughout the
sampling plans discussed by the Abernethy and Chapman audit team in Case 11:

 The auditors had to decide whether to test the 283 invoices by sampling or
by examining the entire population.
 The auditors had to choose between applying sampling for attributes to
evaluate the client's expense accrual or some type of sampling for variables
plan.
 The auditors had to establish an acceptable risk of incorrect acceptance.
 The auditors had to establish an acceptable risk of incorrect rejection.
 The auditors had to set a tolerable misstatement, the amount of error the
firm was willing to accept in the reported balance.
 The auditors had to decide which type of sampling for variables plan would
be used; both mean-per-unit and difference estimation were discussed in this
case. Monetary unit sampling and stratified mean-per-unit sampling are just
two of the other techniques used by auditors.
 The auditors had to select a point estimation of the population error.
 The auditors had to choose a method for randomly selecting the items to be
sampled.

Consequently, even in statistical sampling, a great number of decisions must be

made by the auditor. The legitimacy of the results that are eventually achieved is
related directly to the auditor's ability to make appropriate decisions in each of
these areas. In designing a sample, it is not unusual to obtain assistance from a
specialist, normally from within the firm.

(4)

In the competitive times that now preside over the public accounting profession,
the auditor cannot afford to rely on unnecessarily slow and time-consuming
techniques. More importantly, though, the auditor can never afford to do an
examination in less than a quality manner. Using judgmental sampling simply
because it may be faster is a shortsighted approach. Each audit must be performed
appropriately regardless of the amount of time involved.

Because of the time pressures present in modern auditing, each auditor needs to
possess a ready knowledge of statistical sampling techniques so that the efficiency
of their use can be increased substantially. Certainly, any procedure is
 time-consuming if the auditor's understanding is limited. Through education
and the utilization of devices such as preprinted forms and computers,
statistical sampling plans can be carried out in a minimum of time. However,
the auditor should continue to be alert to situations where judgmental
sampling can be applied. Not every test warrants the use of statistical
sampling, and the auditor needs to be capable of drawing this distinction.

(5)

If the auditor is seeking to measure a rate of occurrence, sampling for

attributes is utilized. Consequently, this type of statistical sampling is often
associated with tests of controls where an error rate is being estimated. If,
however, the auditor is attempting to determine an amount, sampling for
variables is appropriate. This sampling technique is frequently used in
substantive testing to evaluate the reasonableness of a reported balance.

As is shown by Cases 10 and 11, the distinction between sampling for

attributes and sampling for variables is not always as clear-cut as the previous
paragraph implies. In Case 10, sampling for attributes was used to verify
Luck's expense accrual, whereas sampling for variables was utilized in Case
11 for this same purpose. The auditor must always determine the objective of
a specific test and evaluate which type of testing will achieve that goal in the
most efficient manner.

(6)

Given the risk parameters that have been established by the auditor, the actual total of the Formatted: Justified, Indent: Hanging: 0.25", Line spacing:
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differences in the client's population is estimated to lie between an understatement of $8,960
($3,760 + $5,200) and an overstatement of $1,440 ($3,760 -$5,200). Since the auditor wants
assurance that the client figure is within $8,000 of the real total, the firm cannot accept the
$46,311 as fairly presented. The $8,960 estimation derived from the sample lies outside of
the acceptable boundary. The client total may still be appropriate, but this sample indicates
that too much risk exists to accept the balance without further testing.