Define audit sampling. Why do auditors sample instead of examining every transaction?
Answer to relevant QuestionsDistinguish between Type I and Type II errors. What terms are used to describe these errors when the auditor is conducting tests of controls and substantive tests? What costs are potentially incurred by auditors when such ...List the four factors that enter into the sample size decision. What is the relationship between sample size and each of these factors?Following is a set of situations that may or may not involve sampling. 1. An auditor is examining loan receivables at a local bank. The population of loans contains two strata. One stratum is composed of 25 loans that are ...Doug Iceberge, senior- in- charge of the audit of Fisher Industries, has decided to test the following two controls for Fisher’s revenue process. 1. All sales invoices are supported by proper documentation, that is, a ...Describe the two methods suggested for projecting a non-statistical sample result. How does an auditor determine which method should be used?
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