Term

Definition
the application of audit procedures to less than 100 percent of the items in a population of audit relevance selected in such a way that the auditor expects the sample to be representative of the population and thus likely to provide a reasonable basis for conclusions about the population. 


Term

Definition
it is not economical for auditors to test 100 percent of the population 


Term

Definition
used to estimate the proportion of a population that possesses a certain characteristic 


Term

Definition
the probability that the true but unknown measure of the characteristic of interest is within specified limits 


Term
allowance for sampling risk 

Definition
the difference between the expected and the tolerable deviation rate 


Term

Definition
the possibility that the sample drawn is not representative of the population and leads to an incorrect conclusion 


Term

Definition
all or a subset of the items that constitute the class of transactions 


Term

Definition
relies on the auditor's judgment to determine sample size and evaluate the results 


Term

Definition
the maximum deviation rate from a prescribed control that an auditor is willing to accept 


Term
3 advantages of statistical sampling 

Definition
 helps the auditor design an efficient sample
 helps the auditor measure the sufficiency of evidence obtained
 helps the auditor quantify sampling risk



Term
3 disadvantages of statistical sampling 

Definition
additional costs of:
 training auditors in the proper use of sampling techniques
 designing and conducting the sampling application
 lack of consistent application across audit teams due to complexity of the underlying concepts



Term
3 general steps in attribute sampling 

Definition
 Planning
 Performance
 Evaluation



Term
all 7 steps of attribute sampling (OPS I AD C) 

Definition
Planning
 Determine test OBJECTIVES
 Define the POPULATION characteristics (sampling population, unit, and control deviation conditions)
 Determine the sample SIZE, using the following inputs: (desired confidence level or risk of incorrect acceptance, tolerable deviation rate, expected population deviation rate)
 Select sample ITEMS
 Perform the AUDIT procedures (understand and analyze any deviations observed)
 Calculate the sample DEVIATION rate and the computed upper deviation rate
 Draw final CONCLUSIONS



Term
which type of sampling is used for tests of controls? 

Definition


Term
why use attribute sampling for tests of controls? 

Definition
because the auditor normally attempts to determine the operating effectiveness of a control in terms of deviations from a prescribed internal control 


Term

Definition
Risk of incorrect rejection  relates to the efficiency of the audit 


Term

Definition
Risk of incorrect acceptance. Relates to the effectiveness of the audit. 


Term
MIRAD COPS, which commonly use audit sampling? 

Definition
Math Recalculation  Yes
Inquiry  No
Reperformance  Yes
Analytical Procedures  No
Documents, Inspection of  Yes
Confirmation  Yes
Observation  No
Physical Assets, Inspection of  Yes
Scanning  No 


Term
Benchmarks for assessed importance of a control & tolerable deviation rates 

Definition
Importance High  Deviation rate 35%
Importance Moderate  Deviation rate 610% 

