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This book is about how to reduce large data sets down to the critical few high-risk subsets.
Seminar paper from the year 2016 in the subject Business economics - Revision, Auditing, University of Duisburg-Essen (Auditing, Accounting and Controlling), course: Case Study Seminar on Auditing, language: English, abstract: The rapid growth of American companies at the beginning of the twentieth century resulted in a high demand for audits which are based on selected tests of items that represent the account balances or classes of transaction. Some auditors used to include every transaction from the respective period into the examination. However, some groups of auditors begin to develop methods to apply statistical sampling in auditing processes during the 1950s. This paper is structured as follows: in the main part, audit sampling and relevant terms are discussed. Representativeness of the sample is mentioned, which is significant aspect to make proper conclusions in respect to the population. The different types of generating population and their advantages for sampling. Furthermore, different sampling methods with each other compared, and the advantages and disadvantages of sample selection methods are discussed. In the third part, the main parameters of audit sampling are discussed in detail and their effects on the sample size and overall audit process are mentioned. In the fourth part, MUS system and its benefits and restrictions are clarified. The fifth part summarizes and concludes with the help of the Excel sample.
Sampling has become an acceptable technique that aids internal auditors in the conducting an audit. The requirement to provide just a reasonable and not absolute basis for his internal auditor should exercise professional judgment whether relying on sampling results will be sufficient to support the results of his evaluation. Although sampling has been a recognized audit procedure, relatively little is known about the sampling practices that internal auditors in the Philippines adopt. This study surveyed selected practicing internal audit practitioners on how they: (1) planned sample sizes, (2) selected sample items, and (3) evaluated sample outcomes. It also investigated the level of trainings received by the respondents related to audit sampling, common problems encountered in using sampling techniques, and the primary sources internal auditors consult for guidance regarding sampling and evaluation procedures. The result of the study showed that majority of the internal auditors rely on non-statistical sampling methods for planning sample sizes (63%), sample size selection (57%), and evaluation of sample results (73%). Despite the heavy reliance on non-statistical methods, the respondents reported that they have received less than adequate training techniques to mitigate bias. More so, thirty-five (35%) of the respondents answered that they do not use any procedures to mitigate potential selection biases. Among the statistical sampling selection method, simple random is the most frequently employed, while directed sampling is the most commonly used non-statistical sampling approach. The suitability of sampling techniques to client's transaction was the most common problem encountered in audit sampling. Standards set by the employer were the primary source that respondents consult for guidance concerning sampling and evaluation procedures. Respondents believed that application of audit sampling techniques contribute to the overall effectiveness of the audit activity to a moderate extent. These findings should enable internal audit practitioners to benchmark their sampling practices against current norms of the profession and eventually hope to contribute to the improvement of the professional practice of internal auditing in the country.
Presents fundamentals of statistical sampling as they pertain to auditing. Contains easy-to-understand discussion of attribute, variable and dollar unit sampling, and is presented with a minimum of mathematical notation. Also features numerous questions and cases, and each chapter is preceded by learning objectives.