Audit Sampling

Group 1
GENERAL APPROACHES TO AUDIT
SAMPLING
- There are two sampling approaches that can be used by
the auditor to gather sufficient appropriate evidence.
1.) Statistical sampling
- Uses random based selection of sample.
- Uses the law of profitability to measure sampling risk
and Evaluate sample results.
2.) Non - statistical sampling
- that purely uses auditor judgment in estimating
sample risk, Determine sample size and Evaluating
sample results.

Elaine Joy S. Dela Paz

SIMILARITIES
- Both statistical and non statistical sampling are acceptable.
- Both statistical and non statistical sampling use of auditor
judgment in designing and selecting the sample and performing
audit procedures and Evaluating the results.
- Both approaches cannot assure that the sample will be
representative of the population.
The DIFFERENCE between two method is that statistical
sampling allows auditor to measure or quantify the sampling
risks by using mathematical formula.
STATISTICAL SAMPLING HELP THE AUDITOR TO.
- Design an efficient sample
- Measure the sufficiency of evidence obtained
- Objectively evaluate the sample results.

Joshua Allebas
 Audit Sampling Plan
Refers to the procedures an auditor applies to
accomplish a sampling application

ATTRIBUTABLE SAMPLING
• Designed to test the rate of deviation from a
prescribed control procedure.
•The auditor’s concern is the occurrence rate of
deviations in the population.
VARIABLE SAMPLING
• Designed to test whether an account balance is
materially misstated and therefore addresses numerical
measurements such as a peso value.

STATISTICAL SAMPLING PLAN

• Enables the auditor to make an estimate of the
occurrence rate and to arrive at a conclusion concerning
the relation of the population deviation rate to the
tolerable deviation rate.

Charlene Sevillano
Ruby Jane Villaraza
 SAMPLING RISK
- arises from the possibility that the auditor’s conclusion
based on a sample maybe different from the conclusion
reached if the
entire population were subjected to the same audit
procedure.
-The confidence level ( reliability level) is the
mathematical complement of the applicable sampling risk
factor.
-Sampling risk is to measured and controlled. The auditor
control sampling risk by specifying the acceptable level
when developing the sampling plan.
In performing TEST OF CONTROL, the
aspects of sampling risk are:

*The risk of assessing control risk too high is the

risk that the assessed level of control risk based
on the sample is greater than the true operating
effectiveness of the control.
*The risk of assessing control risk is too low is the
opposite of assessing control risk too high. It is the
risk that the auditor may believe that a control is
operating effectively when it is not.
The two aspects of sampling risk
in substantive testing are:

* The risk of incorrect rejection is the risk that a

sample supports the conclusion that the account
balances is materially misstated when, unknown
to the auditor, the account balance is not
materially misstated( i.e it is fairly stated).
*The risk of incorrect acceptance is the risk that
the sample supports the conclusion that the
account balances is not materially misstated( i.e.,
it is fairly stated) when , unknown to the auditor,
the account balance is materially misstated.
-The risk of incorrect acceptance affects the
effectiveness of the audit.
-The risk of incorrect rejection affects the
efficiency of the audit.

Lora Mae Juanito

 Non-Sampling Risk

• arises from factors that cause the auditor to reach an

erroneous conclusion to reach an erroneous conclusion for
any reason not related to the size of the sample.
• refers to the risk that the auditor may draw incorrect
conclusions about the account balance or class of
transactions because of human errors.
CAUSES OF NON SAMPLING ERROR
This includes all aspects of audit risk that are not due to
sampling.
•The use of inappropriate or ineffective audit procedures.
•Misinterpretation of evidence obtained
•Failure to recognize errors in the sample tested.
The following are situation of
non-sampling risk
>Inappropriate Procedure
The situation where the auditor has chosen the
right sample but has applied the wrong audit
procedure.
>Misinterpretation of Audit Evidence
When the procedure auditor has applied is correct
but he did not properly understand the evidence.
>Failure to recognize errors
The situation where there is the misstatement
present but the auditor fails to recognize it.
Non-sampling risk can never be a mathematical
measured.
Non-sampling risk is something that cannot be
eliminated even if the auditor examines the
entire population.
This risk, however, can be minimize by
√ Proper planning ; and
√ Adequate direction, review and supervision of
the audit team.

Nicole Ann Duenas