Types of Audit Sampling

Auditors often have to pass judgement on large quantities of things, such as financial transactions, goods in inventory, or agreements. Auditors would like to look at each and every one, but doing so would take too much time and be too expensive. Can you imagine the bill if auditors were investigate every purchase made throughout the year at a supermarket? The costs would bankrupt the firm and doing so would take many years to complete.

Instead, auditors have learned to just look at a fraction of the items. We call this fraction a sample. The more likely that there are problems to be discovered, the larger the sample that is taken by the auditing team.

Here are the main ways that auditors select what should be included in the sample:

1. Random Sampling - Every item has the exact same odds of being selected as any other.
2. Systematic Sampling - Every nth item is selected. For instance, the auditor may select every 7th item or every 12th item after a random starting item.
3. Block (Stratified) Sampling - Items are grouped by similar characteristics, and then a sample is drawn.
4. Monetary Unit Sampling - The odds of any item being selected are based upon its value, with higher-value items being more likely to be chosen.
5. Judgmental Sampling - The auditor selects the items for the sample based upon his expertise in the field.

👉 Answer:

👨‍🎓 Here are the steps to figure it out:

• The items were selected based upon the domain expertise of the auditing team.