• Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

Card Range To Study



Play button


Play button




Click to flip

Use LEFT and RIGHT arrow keys to navigate between flashcards;

Use UP and DOWN arrow keys to flip the card;

H to show hint;

A reads text to speech;

22 Cards in this Set

  • Front
  • Back

Concepts of Sampling

Sampling Risk

Sampling Error

Nonsampling Risk

Tolerable Misstatement/Dev rate

Expected Misstatement/Dev Rate

Allowance for sampling risk

Confiedence level

Sampling Risk

Risk sample does not represent the pop

Type I and Type II Errors

Explain the types of errors

Type I: Incorrect Rejection - CR too low

Type II: Incorrect acceptance - CR too high

Sampling Error

Difference between actual error rate or misstatement amt in the pop

Nonsampling risk

Auditor might select wrong procedure, might misapply correct procedure, or misinterpret results

Two types of sampling

Statistical - Uses statistical theory, less judgement, known sampling risk

Nonstateistical - Sampling risk estimated, more judgement, and based on theory & firm guidance

Control testing

To determine if dev rate is too high

Generally statistical

Uses computers

Substantive testing

Misstatement/acct value is too high

Generally nonstatistical

Requires judgement

Careful of small sample sizes

Consider sampling risk
Haphazard selecting most common

Samplers must address

How many/Sample Size

Which ones/Sampling method

How do I interpret results?

How many/Sampling Size

Population Size

Desired confidence level

Margin of error/allowance for sampling risk

Confidence level

How confident do I want to be that im right?

Larger sample = more confidence

Allowance for sampling risk

Tolerable Problems - Expected problems

Smaller difference = more precise

Expected problems

Can be based on historical data

Expected Misstatement/Dev rate

Which items

Statistical Sampling = Every item has equal chance of being selected

Nonstatisical Sampling = Random, Systematic, Haphazard, Judgemental

4 step approach to Interpreting results

1. Sample in misstatement/deviation rate

2.Project to population

3. Consider sampling risk

4. Plausible vs tolerable (want a <)

Attribute Sampling

IC testing

Must define attribute being tested with support

Small Sample size

Low error rate(TE 5%, Expected error 0)

Provides existence question!


(Population BV/Margin of error)*Reliability factor

Steps for Sampling

1. determine Test obj

2.Define: pop, missstatemen/deviation

3.Determine sample size

4. Select sample items

5. Preform auditing procedure

6. Calc projected misstatement

7. Conclude

Calculating results two methods

Ratio Projection

Difference Projection

Ratio Projection

Take Ratio of misstatement and apply to population

Difference Projection

Average misstatement applied to population