History
Sampling is regarded as one of the most necessary parts of auditing today, but as a matter of fact, it was not until 1997 that the “Audit Sampling” standard was issued by the International Auditing and Assurance Standards Board (IAASB). When auditing first came into fruition sampling was not given the same consideration that is has today, as company owners were “interested in discovering major accounts of fraud or misstatements in the financial statements” (Oana, Tatiana 2013, and expected 100% assurance. This resulted in a need to test and verify all elements of a class of transactions or account balance, over the course of the audited period. This practice would only be able to last so long, as the global rise of computers and databases …show more content…
In 1981 AICPA had begun the first standard studying Audit Sampling in America referred to as SAS No. 39. The study of the standard was completed in 2002, as per SAS No. 111. Prior to the completion of the American standard, IAASB issued ISA No. 530 “Audit Sampling” in 1997. Canadian Auditing Standards (CAS) of Audit Sampling are directly linked to that of ISA, and are listed under CAS No. 530. CAS adopted ISAs in 2007, resulting in a change to the format of the Handbook sections, which will explain why both Audit Sampling sections of the two standards are so …show more content…
Stratification is “the process of dividing a population into subpopulations, each of which is a group of sampling units which have similar characteristics” (Mayrick 2008). Stratification takes away the variability of the population. Value-weighted selection may improve efficiency by identifying the larger value sampling units that makes up a population, such as the monetary units that make up accounts receivable. “The auditor may then examine the particular items, for example, individual balances, that contain those monetary units” (CAS No.
Sampling is regarded as one of the most necessary parts of auditing today, but as a matter of fact, it was not until 1997 that the “Audit Sampling” standard was issued by the International Auditing and Assurance Standards Board (IAASB). When auditing first came into fruition sampling was not given the same consideration that is has today, as company owners were “interested in discovering major accounts of fraud or misstatements in the financial statements” (Oana, Tatiana 2013, and expected 100% assurance. This resulted in a need to test and verify all elements of a class of transactions or account balance, over the course of the audited period. This practice would only be able to last so long, as the global rise of computers and databases …show more content…
In 1981 AICPA had begun the first standard studying Audit Sampling in America referred to as SAS No. 39. The study of the standard was completed in 2002, as per SAS No. 111. Prior to the completion of the American standard, IAASB issued ISA No. 530 “Audit Sampling” in 1997. Canadian Auditing Standards (CAS) of Audit Sampling are directly linked to that of ISA, and are listed under CAS No. 530. CAS adopted ISAs in 2007, resulting in a change to the format of the Handbook sections, which will explain why both Audit Sampling sections of the two standards are so …show more content…
Stratification is “the process of dividing a population into subpopulations, each of which is a group of sampling units which have similar characteristics” (Mayrick 2008). Stratification takes away the variability of the population. Value-weighted selection may improve efficiency by identifying the larger value sampling units that makes up a population, such as the monetary units that make up accounts receivable. “The auditor may then examine the particular items, for example, individual balances, that contain those monetary units” (CAS No.