Textbook Notes (363,143)
BUS 426 (31)
Chapter 13

# Bus 426 - Chapter 13

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School
Simon Fraser University
Department
Course
BUS 426
Professor
Michael Favere- Marchesi
Semester
Fall

Description
Chapter 13 -Audit Sampling Concepts Audit Sampling occurs when: 1. When less than 100% of the items under examination are being auditing 2. Each item in the population can be selected as part of the sample Representative Sample: A sample with the same characteristics as those of the population Non-Sampling Risk: The chance of exception when audit tests do not uncover exceptions existing in the sample; Caused by failure to recognize exceptions and by inappropriate or ineffective audit procedures  Caused by the auditor’s ability Sampling Risk: The inherent part of sampling that results from testing less than the entire population Probabilistic Sample Selection, where every sample has a chance to be selected Statistical Sampling: The use of mathematical measurement techniques to calculate formal statistical results and quantify sampling risk  Confidence Level: Statement of Probability  Simple Random Sample Selection: Every possible combination of elements has an equal chance of being selected o Replacement vs Non-Replacement, in here, replacement means that a number can be selected twice in the sample  Systematic Sample Selection: Auditor calculates an interval by the number of sample items and selects the items for the sample based on the size of the interval and a randomly selected number between zero and the sample size  Probability Proportionate-to-size Sample Selection: Google Wikipedia page, also known as monetary unit sampling  Stratified Sample Selection: The sample is split into smaller sets with similar characteristics Non-Probabilistic Sample Selection Judgmental Sampling: Use of professional judgment rather than statistical methods to select sample items for audit tests Chapter 13 -Audit Sampling Concepts  Directed Sample Selection: Each item in the sample is selected by a judgmental criteria by the auditor  Block Sample Selection: Sample items are selected in measured sequences, ex: with 100 items, you sample 5 blocks of 20 items  Haphazard Sample Selection: Sample items are chosen without regard to their size, source, or other distinguishing characteristics (selecting without bias) Statistical Sampling Methodologies  Attribute Sampling: A probabilistic method of sample evaluation that results in an estimate of the proportion of items in a population containing a characteristic or attribute of interest o Exception Rate or Occurrence Rate: The items in a population that contain a specific attribute to the total number of population items o Auditors inter
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