The document outlines the principles and methods of audit sampling, emphasizing the importance of selection techniques to achieve reliable conclusions about a population based on a sample. It discusses statistical and non-statistical sampling approaches, definitions of sampling risks, and the need for stratification to ensure representative samples. The document aims to guide auditors in reducing sampling risks and ensuring accurate evaluation of financial statements.

1. Audit Sampling

2.  Introduction
 Scope
 Effective Date
 Objective
 Definition

3.  Definition of audit
Independent analysis
Systematic approach
Aimed to provide the opinion
 Definition of sampling
process
Less than 100% from population

4. Before sampling
After Sampling

5.  Less than 100% of items within a population
 All sampling units have chance of selection
 Reasonable basis to draw conclusion
Good Audit Sampling

6. Application
At that time when auditor has decided
audit sampling while performing audit
Use of various statistical and non-
statistical sampling when designing and
selecting the audit samples, performing test of
controls and test of details and evaluating
result from the sample.

7. To get reasonable basis for conclusion about
the population from which sample is collected.

8. April 1, 2009

9.  Population
 Sampling risk
 Non-Sampling risk
 Anomaly
 Sampling unit
 Stratification
 Tolerable misstatement
 Tolerable rate of deviation

10. Definitions
Population : Entire set of data from which sample is selected and about
which auditor wishes to draw conclusions.
Sampling Risks: Auditors conclusion may have been different if entire
population was taken into consideration
Non-sampling Risk: The risk that auditor reaches erroneous
conclusion for any reason not related to sampling risk
Sampling Unit: The individual item constituting a population.

11. Statistical Sampling
These type of sampling have following characteristics
Random selection of sample units
The use of probability theory to evaluate sample results
including measurement of sampling risks.
If sample lacks above characters then it is called as Non-Statistical
Sampling.

12. Stratification
The process of dividing populations into sub-Population each of
which is a group have sampling units of similar characters.
Tolerable Mistake
A monetary amount set by the auditor in respect of which the
auditor seeks to obtain an appropriate level of assurance
that the monetary amount set by the auditor is not exceeded by the
actual misstatement in the population.
Tolerable rate of Deviation
A rate of deviation from prescribed internal control procedures set by
the auditor in respect of which the auditor seeks to obtain an
appropriate level of assurance that the rate of deviation set by the
auditor is not exceeded by the actual rate of deviation in the
population.

13. Characteristics of the population
Ask question to ourselves, “ Is sampling
size sufficient to reduce sampling risk to
acceptably low level?”
Next important questions for ourselves,
“Does every item in the population have equal
chances of selection?”

14. Nature and Cause of Deviations and Misstatement
-Auditor shall investigate the nature and cause of any deviations or
misstatement identified
- Evaluate their possible effects
Extreme rare situation
consider misstatement as Anomaly, but before it auditor has to obtain
high degree of certainty.

15. Presented By : Dipendra Prasad Poudel
Date : 26/03/2014
Contact information
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