The Odds are Against Auditing: Statistical Sampling in Audit
The Odds are Against Auditing: Statistical Sampling in Audit December 14, Tuesday 10:00 AM PST | 01:00 PM ESTWhy Should You Attend:Sampling plans are paradoxical by their nature:• If a system is out of control, a small sample will identify it.• If a system is in control, even a large sample might not lead to any findings.• Ineffective sampling plans can masks the ability to determine the correct state of the system being audited.The purpose of auditing is to identify failures in the system or gross negligence. The real question, “how bad does thesystem need to be for auditing to work?” This talk will look at statistical distribution for rare events to show that thesample size needs to larger when the systems are better. This is a paradox for most auditors who when a problem isdiscovered increase their sample size.Most auditing sampling plans are based on either the binomial or normal distribution, though rare events usually followthe Poisson distribution. This talk will show how the Poisson relates to the binomial and normal distributions. Specialattention will be given to risk management strategies. A review and comparison of different sampling strategies will bepresented.Date: December 14, Tuesday 2010Time: 10:00 AM PST | 01:00 PM ESTDuration: 90 MinInstructor: Steven WalfishLocation: Your office or conference room (no need to travel!) Steven Walfish Register NowAreas Covered in the Seminar:• Common sampling strategies.• Risk based selection of sample size.• Binomial distribution.• Poisson distribution.• Confidence intervals around estimates.• How to justify a sampling plan.• When is auditing not necessary.