BUS 426 Chapter Notes - Chapter 13: Probabilistic Method

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 426
• Professor: Michael Favere- Marchesi

Document Summary

Audit sampling occurs when: when less than 100% of the items under examination are being auditing, each item in the population can be selected as part of the sample. Representative sample: a sample with the same characteristics as those of the population. Non-sampling risk: the chance of exception when audit tests do not uncover exceptions existing in the sample; caused by failure to recognize exceptions and by inappropriate or ineffective audit procedures. Sampling risk: the inherent part of sampling that results from testing less than the entire population. Probabilistic sample selection, where every sample has a chance to be selected. Statistical sampling: the use of mathematical measurement techniques to calculate formal statistical results and quantify sampling risk. Simple random sample selection: every possible combination of elements has an equal chance of being selected: replacement vs non-replacement, in here, replacement means that a number can be selected twice in the sample.