Term

Definition
An inherent part of sampling that results from testing less than the entire population. 


Term

Definition
Occurs when audit tests do not uncover errors that exist in the sample. Can result from:
1. Auditor's failure to recognize exceptions, or
2. Inappropriate or ineffective audit procedures. 


Term

Definition
Characteristic being tested for in a population. 


Term

Definition
Occurs when the attribute being tested for is absent. 


Term

Definition
The investigation of individual exceptions to determine the cause of the breakdown in internal control. 


Term

Definition
(Acceptable risk of assessing control risk too low)
The risk that the auditor is willing to take of accepting a control as effective or a rate of monetary misstatements as tolerable when the true population exception rate is greater than the tolerable exception rate. 


Term

Definition
A statistical, probablistic method of sample evaluation that results in an estimate of the proportion of items in a population containing a characteristic or attribute of interest. 


Term

Definition
Testing less than 100% of a population for the purpose of making inferences about that population. 


Term

Definition
A nonprobabilistic method of sample selection in which a selection of several items are picked in sequence.
Ex. Thus to select 5 blocks of 20 invoices, one would select one invoice and the block would be that invoice plus 19. This would be repeated 4 more times. 


Term

Definition
(Computed upper exception rate)
The upper limit of the probable population exception rate; the highest exception rate in the population at a given ARACR (acceptable risk of assessing control risk too low). 


Term
Directed Sample Selection 

Definition
A nonprobabilistic method of sample selection in which each item in the sample is selected based on some judgmental criteria established by the auditor. 


Term

Definition
(Estimated population exception rate)
Exception rate the auditor expects to find in the population before testing begins. 


Term

Definition
The % of items in a population that include exceptions in prescribed controls or monetary correctness. 


Term
Haphazard Sample Selection 

Definition
A nonprobabilistic method of samle selection in which items are chosen without regard to thier size, source, or other distinguishing characteristics. 


Term

Definition
Sample size determined by professional judgment (nonstatistical sampling) or by statistical tables (attribute sampling). 


Term
Nonprobabilistic Sample Selection 

Definition
A method of sample selection in which the auditor uses professional judgment to select items from the population. 


Term

Definition
The risk that the auditor fails to identify existing exceptions in the sample; nonsampling risk (nonsampling error) is caused by failure to recognize exceptions and by inappropriate or ineffective audit procedures. 


Term

Definition
The auditor's use of professional judgement to select sample items, estimate the population values, and estimate sampling risk. 


Term

Definition


Term
Probabilistic Sample Selection 

Definition
A method of selecting a sample such that each population item has a known probability of being included in the sample and the sample is selected by a random process. 


Term

Definition
A sample in which every possible combination of elements in the population has an equal chance of constituting the sample 


Term

Definition
A sample with characteristics the same as those of the population. 


Term

Definition
(Sample Exception Rate)
= Number of exceptions in the sample
Sample Size 


Term

Definition
A frequency distribution of the results of all possible samples of a specified size that could be obtained from a population containing some specific parameters. 


Term

Definition
Risk of reaching an incorrect conclusion inherent in tests of less than the entire population because the sample is not representitive. 


Term

Definition
The use of mathematical measurement techniques to calculate formal statistical results and quantify sampling risk 


Term
Systematic Sample Selection 

Definition
A probabilistic method of sampling in which the auditor calculates an interval (the population size/ number of sample items desired) and selects the items for the sample based on the size of the interval and a randomly selected starting point between zero and the length of the interval. 


Term

Definition
(Tolerable Exception Rate)
The exception rate that the auditor will permit in the population and still be willing to conclude the control as operation effectively and/or the amount of monetary misstatements in the transactions established during planning is acceptable. 


Term

Definition
An element in the population can be included in the sample more than once if the random number corresponding to that element is selected more than once. 

