Auditor is responsible to design and perform audit procedures to obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the auditor’s opinion. In order to draw conclusions about the population of audit relevance, an auditor will use audit sampling to select sample from the population.
There are many methods of selecting samples and the five (5) principal methods allowable by ISA 530 Audit Sampling are as follows:
Example 1: MUS
Steps:
- Determine the sampling interval by dividing book value by sample size.
- Arrange the listing using some sort of ordering sequence such as by name, by numbering and etc.
- Pick a random number using a random-number-generator computer program.
Illustration:
Receivables listing with 100 records amounting to RM300,000.
- Sampling interval – 3,000 (RM300,000/100 records)
- The receivables listing is arranged according to customer name from A to Z.
- Pick a random number from 1 to 3,000, which the random number has to be less than the sampling interval (3,000) and greater than the smallest sampling unit (1). This will be pre-set in the random-number-generator before the sample being selected. Let’s say the random number selected is 500.
Details as explained in the tables below:
