Within the chapter, three alternative statistical sampling plans are introduced and illustrated for use when conducting tests of controls under the second standard of field work: attribute estimation sampling, sequential sampling, and discovery sampling. Importantly, no one of the three statistical sampling plans is necessarily appropriate for all tests. Rather, each is appropriate for particular audit circumstances, and blindly applying a sampling plan to inappropriate populations can lead to audit inefficiencies and, in some cases, ineffectiveness.

Required:

1. Explain the circumstances under which attribute estimation, sequential sampling, and discovery sampling are appropriate.

2. Explain the circumstances under which an auditor might justifiably decide to switch to attribute estimation after sequential sampling has already begun.