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Sampling Methodology - PPMP and APP
Sampling Methodology - PPMP and APP
For the test of controls of the above audit area, the following sampling methodology
will be applied.
A. Definition of Population
The populations for this audit area will be the transactions involving the
following:
The scope will cover transactions from January to December for CY 2016 in
the LGU-ABC.
The sampling method used is Statistical Sampling and the samples will
be computed based on the (Slovin’s Formula) since the population size
is known and the Simple Random Sampling without Replacement
(SRSWOR)1 is applied. Further, this provides a more conservative
approach in determining sample size at a specified confidence level 2.
n= N___
1+ Ne2
1
Distinguished from Simple Random Sampling with Replacement (SRSWR) where the n elements in
the sample need not be distinct, that is, an element can be selected more than once to be part of the
sample (ibid)
2
Ibid.
3
Acceptable bound on the error of estimation (Almeda, Capistrano, Sarte, 2010), equivalent to the
tolerable error rate
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Only the sample size for the transactions involving invitations to
observers and preparation of Observers’ Reports are computed, as
follows:
On the other hand, in view of the minimal number of transactions for the
audit population, 100% of the following audit populations will be tested:
The total sample size for the audit area is Sixty-Five (65) out of One
Hundred Thirty-Two (132) transactions.
Since all transactions of three (3) out of the four (4) audit populations will
be audited, the tolerable error rate4 is set at Fifteen Percent (15%) of the
populations for testing, implying that the auditors are 85% confident that
the selected samples are representative of the control attributes being
tested.
Approved by :
4
Tolerable error rate – percentage of error in relation to the samples selected which does not
materially affect the integrity of the population represented in the sample size. (Section 1.1.6, COA
Resolution No. 95-905 dated July 4, 1995)
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