What is Audit Sampling? Definition, Types, Purpose, Objectives, 5 Methods


Audit sampling is the application of audit procedures to less than 100% of the total population and all the items in the population have the same chance to be selected.

This is to ensure that the items selected represent the total population which enables auditors to draw their conclusion and express their opinion based on their predetermined objective.

Audit sampling is really important because it doesn’t only help auditors to gather sufficient and appropriate audit evidence to draw the audit’s opinion, but also plays a very important part in the audit’s works’ efficiency and effectiveness. That mean auditor is not required to check 100% of object or items to let them express their opinion.

To ensure that the selected items could represent the total population, the selection process and methods should not involve too much from human judgments and should be avoiding bias from auditors.

They only perform their review and verification on the selected items and then express their opinion on the entire population. In general, audit sampling can be performed in two different types.

The first is statistical, and the second is non-statistical sampling. These two types of sampling contain many other methods which will be discussed in detail in this article.

Now, before explaining the types of audit sampling and methods of audit sampling, let’s start with the purpose and objective of audit sampling.

Here they are,

Objectives And Purpose of Audit Sampling:

Audit sampling is a very important part of audit work. No matter whether it is a financial audit, internal audit, or other kinds of audit, audit sampling still needs to be used by auditors.

Audit sampling is also part of the audit standards requirements and it could help auditors to meet their objectives with less effort.

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The following are the purposes and objectives of audit sampling:

  • To gather audit evidence in order to conclude audit opinion.
  • To reduce the works yet audit yet still help audit to reach its conclusion.
  • To provide the basis for the auditor to conclude an audit opinion.
  • To detect any kind of error or fraud that could happen in the company as well as financial statements.
  • To prove auditors have done their jobs base on the required auditing standards.
  • Use as a tool for investigations.

Two Types of Audit Sampling:

Statistic audit sampling:

Statistic audit sampling is the sampling approach where the auditor uses random sampling to select the items from the total population and uses the probabilities technique to measure the result of the testing and make a conclusion.

Using statistical sampling is very important to help the auditor manage and control the audit’s risk. This is because in statistics, we use data and probabilities to select the items from the total population and those data are not prejudged and unbiased by auditors.

This statistic sampling is normally performed where the total population is more than 100 items. Based on my experiences, there are many different tools available in the market that we use could use to perform audit sampling. And, if you don’t have the tool, you can use the function in excel instead of software.

For example, auditors verify the addition of the fixed asset during the year and the total purchase transactions are more than 100 items.

You are an auditor and are assigned to perform testing on fixed assets addition. Statistical sampling is highly recommended in the audit program. And random sampling is the method you decided to use.

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In the statistical sampling, you can consider selecting 10 items from the total population randomly or you can set internal every item that reaches the interval set.

That means every item among 100 items has the same chance to be selected for verification. Once you completed your testing and got the result, then make a conclusion based on the result.

So, this is what statistical sampling looks like and how it is used. The two important things you need to remember about statistical sampling are the items are selected randomly and the conclusion is made based on the result of testing. If either of these two things is not met, then the sampling is called non-statistic.

Non-statistic audit sampling:

Non-statistical sampling, by the way, is different from the statistic. Based on the theory from ISA, any method that does not mean the criteria of the statistic is non-statistic.

That means you have to be very clear and understand well about statistic audit sampling. There are two important things that you can use to identify whether the sampling is systematic or not.

The first one is the selection of data or items is not random. That means the selections are based on judgment. Second, the result of testing from that selection is not used to conclude the nature of the entire population.

The auditor might not use statistic audit sampling to select items for testing. Instead, they might select the items based on

  • Value of items, for example, the top ten highest value.
  • Select the items that higher than a certain amount or value. For example, any items higher than 200,000 USD.
  • Items that contain information or data they want to assess. For example, any purchasing transactions from supplier name Dalata Ltd.
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These methods of sampling are called non-statistic.

Okay, now let’s talk about the types of sample methods that we normally use to perform audit testing

Five Methods of Audit Sampling Selection:

  • Random selection: it is the type of sampling that provides an equal opportunity to all items or units in the total population. This kind of selection could use in excel or other generating tools.
  • Systematic selection: involves selecting items using a constant interval between selections, the first interval having a random start. When using systematic selection, auditors must ensure that the population does not structure in such a manner that the sampling interval corresponds with a particular pattern in the population.
  • Haphazard: selection may be an alternative to the random selection provided auditors satisfy that the sample is representative of the entire population. This method requires care to guard against making a selection that is biased, for example towards items that are easily located, as they may not be representative. It should not be used if auditors are carrying out statistical sampling.
  • Block selection: maybe use to check whether certain items have particular characteristics. For example, an auditor may use a sample of 50 consecutive cheques to test whether cheques are signed by authorized signatories rather than picking 50 single cheques throughout the year. Block sampling may; however, produce samples that are not representative of the population as a whole, particularly if errors only occurred during a certain part of the period, and hence the errors found cannot be projected onto the rest of the population.
  • Monetary Unit Sampling is a type of value-weighted selection in which sample size, selection, and evaluation result in a conclusion in monetary amounts. Monetary unit sampling is a kind of systematic audit sampling.