Perform audit testing in excel: Monetary Unit Sampling Method
Tao Li CPA, CA
Sampling when used in an audit is to provide a
reasonable basis for the auditor to draw conclusions
about the population from which the sample is
The reason to use sampling is because testing of 100%
of population, although would provide most
assurance, sometimes it would be impossible to
perform, or the cost of testing would likely exceed the
There are generally two sampling approaches:
2)non-statistical sampling (e.g. judgemental sampling)
Both sampling approaches require the exercise of
auditor judgment during the planning,
implementation and evaluation of the sampling.
In some circumstances, statistical sampling is more
appropriate, since it can be measured and controlled.
Two most commonly used statistical sampling methods:
Random sampling method
2) Monetary unit sampling method.
Random sampling ensures that all items within a
population stand an equal chance of selection.
Monetary unit sample is a value-weighted sampling that
each dollar in a population has an equal chance to be
The random sampling method would be more suitable for
test of control and monetary unit sampling would be best
fit for test of balances.
In practice, monetary unit sampling requires a lot of
calculations and need specifically designed computer
software (i.e. audit software). Usually the costs
associated with purchasing audit software and
training would be significant.
The Excel spreadsheet demonstrated here is to show
implementing statistical sampling method in Excel is
Firms without the resources to
purchase expensive audit software may
consider using Excel to perform
sophisticated statistical sampling
The monetary unit sampling method
Is based on the monetary unit sampling method
described in CPEM (Canadian Professional
Engagement Manual) 2012 edition. Please refer to
chapter 17 the manual (volume II) for detail
explanation of this methodology.
• The “Population” sheet
should be prepared to
contain all the
transactions to be
• The “Main” sheet is
where you will enter the
generate test sample and
compute the percentage
of misstatements and
How to use this spreadsheet?
Step 1: preparing your population data on the
Step 2: enter performance materiality and accepted
risk level, then click “Generate Audit Sample” button
to generate a sample.
Step 3: perform audit test, enter correct data and see
• The “Population” sheet contains three
• The third column is the amount
column. If you have credit and debit
amounts shown at different columns,
you need to convert the credit amounts
to negative values and combine them
under a single column.
The sum of the amount column (the third column)
will be automatically populated in the “Population
Dollar Value” field on the “Main” sheet. Note that
the sum is not netted sum. It is a sum of each
• enter performance materiality and accepted risk
level in the Input area.
simply click the
“Generate Audit Sample”
button. The test sample
will be automatically
generated and shown in
the Sample Output area.
Perform the audit test
and enter the correct
amount for each item in
the test sample at the
fields in the “correct
• The misstatement and
% of misstatement for
each item will also be
• After you entered the
correct amounts for all
testing items, look at
the underneath of the
list to see the total % of
errors, average % of
errors and projected
misstatement that have
been calculated by the
The excel spreadsheet can be downloaded here:
If you have any questions, comments or suggestion,
please feel free to email me at email@example.com