The Use Of Sampling During An Audit

The purpose of this memo is to describe the sampling process and illustrate how sampling can be used during an audit. This memo will begin by defining what sampling is, when it should be used, and the risks associated with it. The memo will then continue to describe the basic steps involved with sampling, define terms within those steps, and describe the use of sampling in the audit by identifying two situations in which sampling is used in an audit.

Sampling is the objective of which is to make a statement about a population of interest by examining only a subset of that population. An engagement team would consider using sampling when the question of interest does not have the need for exact information but more of an average and the number of items comprising the population is large enough that testing all of the population would be inefficient. Thus, the reason an engagement team would use sampling is because sampling is efficient in which allows an individual to receive information about the population of interest in a quicker amount of time than it would
In the planning stage, there are three steps. The first step is determining the objective. This is directly related to the question of interest or the purpose of conducting the sample. The second step is defining the characteristic of interest. This is a critical step in the sampling process of planning because it is the measure that will be obtained from the sample items that is evaluated against a criterion that is related to the objective. The third and final step within the planning stage is defining the population. Although it seems very simple, this must be defined in a way that meets the objective of the sampling application. Thus, when defining the population you cannot be too specific or too broad in