A Keynote On The Audit Sampling Results
For the sample asset chosen by the auditor from the business transactions of an organization, the appropriate procedures must be carried out to derive the sampling results that suits the audit objective. The evaluation of results must include
- Examining the errors found within the sample
- The precise projection of errors recovered in the sample to the population
- Reconsidering the sampling risk involved with the sampling errors
Key points to be taken care off
- During error analysis of sampling, the auditor should primarily make sure that the accounted item has an error that is defined in the audit objectives. No doubts should be associated with this mindset that has great chances of affecting the auditing.
- If the auditor is not able to collect the sufficient evidence regarding a sampling asset, he must perform other alternate means to seek the evidence. If further, he is not able to derive any evidence, the sampling section considered for analyses is stamped as an error.
- The auditor should also be free to analysis the different qualitative aspects of the errors which include the nature and causes of error and even the consequences of these errors on the other phases of the audit process.
- While auditing, the auditor must be able to differentiate the sampling group exhibiting the same features so that he is able to identify the population and its sub-population for performing a separate analysis for each section.
How to project the errors?
There are several established methods of projecting the error from the samples taken out from a population. All of them follows a consistent method that suits the sample selection respectively. The auditor should make sure that all the qualitative dimensions of errors are found while trying to project these errors. So, when a population is subdivided to analyze the errors, the process is applied to each section and finally, the results are effectively combined to give out the best output.
How is the reviewing of sampling risk considered?
It is the duty of the auditor or the auditing staff to check whether the errors arising from the population stays within the permissible or tolerable limits. For this, the auditor compares the projected errors to the tolerable error type based on specified control methods adopted for auditing. Here the projected error refers to the net of adjustments approved by the auditor and if the value goes higher than tolerable error, the auditor needs to re-examine the risk and further, if the risk maintains a higher value, then he should perform alternative procedures.