Page 124 - DCOM509_ADVANCED_AUDITING

Unit 7: Audit Sampling

For instance, the auditor might want to obtain a random number sample of items sold to one Notes
customer.
Assume that a computer listing is available which consists of pages containing a total of 20,000
items. The pages of the listing can be easily numbered or their numbers determined by counting.
There may be the same number of lines on most pages, with perhaps fewer on some.

Assume that there are 400 pages in the listing with 50 lines on most pages. The auditor would
draw two lists of random numbers, one for three digit numbers between 1 and 400 and one for
two digit numbers between 1 and 50. Items would then be selected by pairing numbers from the
first and second list to identify the page and line on which the item to be selected is located.

Systematic Selection

For this method, the auditor determines a uniform interval by dividing the number of physical
units in the population by the sample size then rounding up. A starting point is randomly
selected and each item after that is selected at the uniform interval. If the population is arranged
randomly, systematic selection is essentially the same as random number selection. However,
if the population is not randomly arranged, for instance, if sales are listed by item, rather than
in the order made, there may be problems with this method.
One way to ensure more randomness in a systematic sample is to re-compute the interval each
time by use of a random-number table. In this approach the auditor would select a list of random
numbers. The first number would be the starting point. The second number would tell the
auditor the interval to count to the next item to be selected. For instance, if the first two random
numbers are 503 and 219, the auditor would select item 503 to start, then item 722 (503 + 219). In
this approach, the auditor might have to go through the population more than once to finish
drawing all the items. The number of digits to be used for the random numbers should make
intervals that are large enough to go through the entire population a least once.

Determine the Sample Size Step 6

Attribute Sampling (Yes/No)

To perform an attribute test, sample size should be determined as follows:
1. If the sample is drawn from the entire audit period, use an initial sample of 50 items. If the
sample is drawn from a block, or if the population is limited in some other way, the initial
sample should be 100 items.

2. If one or more deviations are found in the sample, the auditor must either reject the item
being tested, or may expand the sample. If the auditor chooses to expand the sample, an
additional number of items equal to the initial sample should be tested.
3. If one or more additional deviations are found, the auditor must either reject the item
being tested, or may expand the sample to the appropriate variables sample size and use
the results to estimate the amount of error in the item being tested.

Variables Sampling (Numbers)

A critical question must be answered before the sample size for a variables sample can be
computed. Is the population relatively homogeneous?

Homogeneous populations can be tested using smaller size samples since there are fewer
exceptional items to skew the results. Non-homogeneous populations require larger size samples.

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