MGT421H5 Lecture Notes - Lecture 6: Financial Statement, Audit Risk
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Less than 100% of items in population under examination are being audited. Sampling = examining a set from a population. Sampling care about that sample is representative of population. Sampling risk if pick sa(cid:373)ple that"s (cid:374)ot represe(cid:374)tati(cid:448)e a(cid:374)d do(cid:374)"t fi(cid:374)d the (cid:373)istake that it is exists. Non sampling risk even if pick sample that is representative, do(cid:374)"t fi(cid:374)d (cid:373)istake that is something else. Pick a sample: statistical each one has equal probability of being chosen, non statistical some items will have greater probability of being selected. Care about cutoff do(cid:374)"t (cid:449)a(cid:374)t to take a whole population and have equal or sub sample where each sample item has chance of being selected. When looking at cutoff want to look at things at the end of th year. When want to focus on material or direct sample accounts tend to go to direct sample accounts. Approach as if want to do random sample but pick specific things.
