# Essay about Chapter 9 PowerPoint

Submitted By Steven-Vines
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Chapter 09
Audit Sampling

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9-1

What is Audit Sampling?

Applying a procedure to less than
100% of a population
To estimate some characteristic of the population Qualitative
 Quantitative

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9-2

Risk

Sampling risk

risk that the auditors’ conclusions based on a sample may be different from the conclusion they would reach if they examined every item in the population

Non-sampling risk risk pertaining to non-sampling errors
 Can be reduced to low levels through effective planning and supervisions of audit engagements 

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9-3

Non-statistical Sampling

The auditor estimates sampling risk by using professional judgment rather than statistical techniques
Provides no means of quantifying sampling risk
Sample may be larger than necessary or auditors may unknowingly accept a higher than acceptable degree of sampling risk

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9-4

Sampling

Allows auditors to measure and control sampling risk which helps:
Design efficient samples
 Measure sufficiency of evidence
 Objectively evaluate sample results

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9-5

Selection of Random Sample

Random sample results in a statistically unbiased sample that may not be a representative sample
Random sample techniques
Random number tables
 Random number generators
 Systematic selection

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9-6

Random Number Table Figure
9.1

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9-7

Other Methods of Sample Selection

Other methods

Haphazard selection
 Select items on an arbitrary basis, but without

any conscious bias

Block selection
 Block sample consists of all items in a selected

time period, numerical sequence or alphabetical sequence 

Stratification

Technique of dividing population into relatively homogeneous subgroups

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9-8

An Illustration of
Stratification

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9-9

Types of Statistical Sampling Plans

Attributes sampling
Discovery sampling
Classical variables sampling
Mean-per-unit estimation
 Ratio estimation
 Difference estimation

Probability-proportional-to-size sampling

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9-10

Dual Purpose Test

Tested used both as a test of control and substantiating the dollar amount of an account balance

Ex. Test to evaluate the effectiveness of a control over recording sales transactions and to estimate the total overstatement or understatement of the sales account

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9-11

Allowance for Sampling…