Audit sampling

Learning objective

It is inef$$cient for auditors to test every transaction and record when auditing the $$nancial statements; instead, samples of transactions and balances are used.

Identify which sampling methodis most appropriate in different circumstances.

The sampling methods available to auditors are:

random selection

systematic selection

haphazard selection

block selection

judgemental selection

There are advantages and disadvantages associated with each of these sampling methods, but the auditor must choose the method that allows them to make a conclusion on the entire population based on the results of testing the sample.

Strati$$cation $($dividing a population into smaller groups with similar characteristics$)$ can be used prior to any of the sampling methods mentioned above.

Required

For each of the procedures, determine which method of audit sampling should be used and justify the choices.

Sampling method:

Justi$$cation:

How can the auditor be sure that the sample they have chosen is representative of the population?

What would be the impact on the auditor's judgement of a sample that is not representative of the population? Could this have an impact on the validity of the auditor's opinion on the $$nancial statements?