BU477 Chapter Notes - Chapter 11: Stratified Sampling, Probabilistic Method
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Audit sampling: selective examination of data used when 1) < 100% of items in population under examination are being audited, and 2) each item (sampling unit) in the population could be selected as part of the sample. Population: set of accounts/transactions which auditor wishes to draw a conclusion. Representative sample: sample with same characteristics as population. Sampling risk: risk that audito(cid:396) (cid:396)ea(cid:272)hes i(cid:374)app(cid:396)op(cid:396)iate (cid:272)o(cid:374)(cid:272)lusio(cid:374) (cid:271)/(cid:272) sa(cid:373)ple is(cid:374)"t representative of population; inherent part of sampling resulting from testing less than entire population. Exception rate: % of items in population that include exceptions in prescribed controls or monetary correctness. Control sampling risk by adjusting sample size and using appropriate method of selecting sample items in population. Non-sampling risk: risk that auditor makes an incorrect conclusion due to failure to recognize exceptions and/or inappropriate or ineffective audit procedures. O(cid:272)(cid:272)u(cid:396) (cid:271)/(cid:272) audito(cid:396)s do(cid:374)"t u(cid:374)de(cid:396)stand what an exception is or because auditor is bored and tired.
