Factors that Affect Audit Sample Size
Lesson:
Auditors don't have the time and energy to examine everything. They need to test subsets of items, called samples.
How do auditors know how many samples to examine? In general, auditors try to balance the costs of examination with potential benefits of examination.
The greater the odds that a smaller sample size will miss something important, the more important it is to increase the sample size.
Ultra Biz, a recent audit client, is trying to understand the bill for a recent audit.
Here are the relevant facts:
- You noticed that the chances that serious problems exited were rated as very low.
What factor affected the number of samples required, and did it necessitate more or less testing?
Answer:
- It was audit risk - the less likely for serious errors to exist, the fewer tests are required.
Explanation:
-
Tests are expensive, so they are more common in areas where auditors expect to find more problems.