ADMS 4551 Chapter Notes - Chapter 11: Non-Sampling Error, Audit Risk, Sample Size Determination

• School: York University
• Department: Administrative Studies
• Course: ADMS 4551
• Professor: Larry Yarmolinsky

Document Summary

If estimate 3% of invoice procedure not followed and sample showed 3 document missing every 100 = representative. If 2-4 documents missing reasonably representative / many missing nonrepresentative & auditor understanding of error incorrect: for stob test 20% of ar balance for existence not considered representative. Acceptable method if reasonable # of blocks used year end: advantage less costly, haphazard sample selection (hss) Items chosen without regard to size/source/characteristic non bias: shortcoming remaining unbiased auditor"s judgment impact item selection, advantage- less costly ex. Interval divide population size by # of sample items desired: ex. 652-3151 interval, 125 sample (3151-652)/125 = 20: choose 0-19 ex. Determine if sampling is appropriate nature of population / accounts & assertions / assurance required: 2. Determines objectives of test & defines deviation (toc) / mm (stod: choose statistical/nonstatistical binary characteristics or monetary balance, 3. Determine sample size & selects item items representative: method pss/nss, 4.