Explain the process and benefits of audit sampling-Stephanie Smith-Jeffries

Sampling is typically used when the question of interest has the following two characteristics: The need for exact information is not important and the number of items comprising the population is large (Louwers, Ramsay, Sinason & Stawser, 2008).

Audit sampling trades effectiveness for efficiency thus it sampling allows an individual to obtain information about a population of interest in a fraction of the time it would take to examine the entire population. In other words, sampling is more efficient. However, because the individual is not examining all items in the population, there is a chance that sampling will not provide the correct answer to the question being examined (Louwers, 2008)..

Audit sampling is used when the gains associated with efficiency exceed the losses associated with effectiveness. In addition, certain types of sampling plans allow the losses associated with reduced effectiveness to be quantified and limited to relatively low levels.

Statistical sampling plans allow the risk to be measured and controlled to acceptable levels. These plans apply the laws of probability to selecting sample items for examination and evaluating sample results. Specifically, statistical sampling plans provide the auditor with the ability to make quantitative statements about the results and to measure the sufficiency of evidence gathered then evaluate the results in such a way to control sampling risk.

Nonstatistical sampling plans differ in terms of how sample size is determined and how the results are evaluated. In some circumstances, it is not necessary to use the laws of probability to select sample items with nonstatistical sampling (Louwers, 2008).

Generally accepted auditing standards (GAAS) do not require the use of statistical sampling procedures. In fact, a survey of practicing auditors in public accounting, industry, and government revealed that 85 percent of all...

Sampling is typically used when the question of interest has the following two characteristics: The need for exact information is not important and the number of items comprising the population is large (Louwers, Ramsay, Sinason & Stawser, 2008).

Audit sampling trades effectiveness for efficiency thus it sampling allows an individual to obtain information about a population of interest in a fraction of the time it would take to examine the entire population. In other words, sampling is more efficient. However, because the individual is not examining all items in the population, there is a chance that sampling will not provide the correct answer to the question being examined (Louwers, 2008)..

Audit sampling is used when the gains associated with efficiency exceed the losses associated with effectiveness. In addition, certain types of sampling plans allow the losses associated with reduced effectiveness to be quantified and limited to relatively low levels.

Statistical sampling plans allow the risk to be measured and controlled to acceptable levels. These plans apply the laws of probability to selecting sample items for examination and evaluating sample results. Specifically, statistical sampling plans provide the auditor with the ability to make quantitative statements about the results and to measure the sufficiency of evidence gathered then evaluate the results in such a way to control sampling risk.

Nonstatistical sampling plans differ in terms of how sample size is determined and how the results are evaluated. In some circumstances, it is not necessary to use the laws of probability to select sample items with nonstatistical sampling (Louwers, 2008).

Generally accepted auditing standards (GAAS) do not require the use of statistical sampling procedures. In fact, a survey of practicing auditors in public accounting, industry, and government revealed that 85 percent of all...