[AUD] Sampling

0. General

 

Sampling 대상

Risk assessment (x)

TOC ( observation x, inspection 0, inquiry x, reperformance x)

ST ( AP x, TOD balance 0, transaction x)

 

Non-statistical / statistical sampling

Both involve judgment in planning,executing, evaluating the results of the sample

Both provide sufficient, competent evidential matter

 

Non-sampling risk/ Sampling risk

Non-sampling risk

failure to select appropriate audit procedures

failure to recognize misstatement in documents examined

Misinterpret results of audit tests

 

Sampling risk

	TOC	ST
Efficiency	the risk of underreliance	the risk of incorrect rejection
Effectiveness	the risk of overreliance	the risk of incorrect acceptance
type	Attribute sampling %	Variable sampling $ (PPS, classical)

 

 

1. Statistical(attribute) sampling step for test of controls (%, rate)

 

Determine Sample Size

1) Allowable risk of overreliance (sampling risk)

- 샘플링을 하기 때문에 생기는 위험

- Inverse relationship with sample size 샘플링을 안하는것과 가까워지면(전체테스트) 위험이 줄어든다

2) Tolerable deviation rate(TDR)

- Maximum rate of deviation auditor is willing to accept

- Inverse relationship with sample size 

>>>>  auditor deciedes 1),2)

 

3) Expected population deviation rate

- Estimation of deviation rate in an entire population, 오류가 있을 가능성

- Direct relationship with sample size

4) Population size

- Direct relationship with sample size

>>> 주어지는 요소

 

Evaluate the Sample results

1) Calculate the sample deviation rate

    sample deviation rate = number of deviations found in the sample

2) Determine the upper deviation limit(rate)

    Upper deviation limit = Sample deviation rate + allowances for sampling risk

 *auditor not able to test the control as planned, nor alternative procedure > deviation from the prescribed control

 

>>> UDL <= TDR: CR adequate

 

2. Statistical(Variables) Sampling steps for test of details ($, amount)

- identify individually significant items

 

Determine sample size

1) Acceptable level of risk of incorrect acceptance 

- sampling risk

- inverse relationship w sample size

2) Tolerable misstatement

- preliminary materality amount

- inverse relationship with sample size

3) Expected amount of misstatement

- Estimate of misstatements in the entire population

4) Population size

 

Evaluate the sample results

1) Calculate projected misstatement

2) Determine the upper limit on misstatement

    Upper limit on misstatement = Projected misstatement + allowance for sampling risk

 

>>> UDM <= TM: support conclusion

 

 

Classical variable Sampling / PPS

Classical variable Sampling	PPS(dollar unit sampling)
sampling unit: physical unit	sampling unit: monetary unit
Test for over / understatement	Test for overstatement
individually significant items is not automaticaly selected	individually significant items, automatically selcted
estimation of standard deviation in amount is required to determine sample size	no requirement for estimation of standard deviation
inclusion of zero, negative balance possible	inclusion of zero, negative balance not possible
easy to expand sample size	difficult to expand sample size
smaller sample size, many misstatements	smaller sample size, little misstatements
	easy to use

 

Classical 

	# of accoount	Book value	Audit value
Population	4100	5M	?
Sample	200	250K	300K

  1) Ratio estimation sampling (value)

       * effective when audit amounts correlates between (proportional to) book values

        250k:300k = 5M: x

        x =6M

  2) MPU (units)

        200:4100 = 300k:x

       x=6150k

  3) Diff (units)

            300-250=50K

            200:100=4100:x , x = 1025K

            ? = 5M-1025K

             

PPS

- Interval 보다 작을경우 projection 해야함, 클경우 그대로 가져옴

- Taining = diff/recorded amount

1) Interval =Tolerate M / *Reliability Factor

    * risk of incorrect acceptance can be specified 

2) Sample size = Total reported Amount / Sampling Interval (roundup)

    * stratification interval큰숫자합 + interval작은 숫자합