15 – What is Audit sampling definition?

According to The international standards on auditing (ISAs), ISA (530) defines audit sampling
as "The application of audit procedures to less than 100% of items within a population of audit
relevance such that all sampling units have a chance of selection in order to provide the auditor
with a reasonable basis on which to draw conclusions about the entire population".

16 – Explain the Representative Sample concept.

A representative sample means that the characteristics in the sample are roughly the same as
those of the population, which denotes that the sample items are identical to the items not
sampled. The auditor is able to increase the probability of a sample to be representative through
increasing his care in designing the sampling process, sample selection, and evaluation of
sample results.
17 – Explain the Sample Size selection.
When identifying the sample size, the auditor should consider the following determinants:
• Sampling Risk: sampling risk occurs when the auditor presents a conclusion by using a
sample that may differ from the conclusion if the auditor uses the same audit procedure by
using the whole population. Sampling risk has an inverse relationship with the sample size.
Therefore, the increase in sample size leads to a decrease in sampling risk and vice versa.

• Tolerable Error: refers to the maximum error in the population that the auditor would be
willing to accept. ISA 530 defines the tolerable rate of deviation as “A rate of deviation
from prescribed internal control procedures set by the auditor in respect of which the
auditor seeks to obtain an appropriate level of assurance that the rate of deviation set by the
auditor is not exceeded by the actual rate of deviation in the population”.
Tolerable rate of deviation has also an inverse relationship with sample size. Thus, the sample
size increases when the acceptable tolerable rate of deviation decreases.
• Expected Population Deviation Rate: The expected population deviation rate is the rate of
deviation that the auditor expects to exist in the population. It can be estimated by the
auditor’s judgment taking into account factors such as the overall control environment and
previous audit findings.
The expected population deviation rate has a direct relationship with sample size. So, if the
expected population deviation rate declines, the sample size decreases.
• Population Size: Population size has a direct relationship with sample size. Therefore, the
increase in population size leads to an increase in sample size.

26 – Explain the major differences between statistical and non-statistical

sampling. What are the three main parts of statistical and non-statistical
methods?
Audit sampling can be conducted using either statistical or non-statistical methods. Statistical
sampling involves randomly selecting sample items and implementing probability theory to
assess sample results and measure sampling risk. On the other hand, non-statistical sampling
does not necessarily entail these same features.
The two methods of audit sampling include the same three phases, which involve planning the
sample, selecting the sample and performing the test, and evaluating the results.
27 – What are the two types of simple random sample selection? Which of
the two methods is used most often by auditors and why?
Types of Random Sampling, are two random (probability) sampling methods. These methods
are:
1. Simple random sampling: Simple random sampling is the randomized selection of a
small segment of individuals or members from a whole population. It provides each
individual or member of a population with an equal and fair probability of being
chosen. The simple random sampling method is one of the most convenient and simple
sample selection techniques.

2. Systematic sampling: Systematic sampling is the selection of specific individuals or

members from an entire population. The selection often follows a predetermined
interval (k). The systematic sampling method is comparable to the simple random
sampling method; however, it is less complicated to conduct.

Auditors most often use systematic sample selection to generate random numbers because it
reduces bias. A. In systematic sampling, the auditor calculates an interval and then
methodically selects the items for the sample based on the size of the interval.