# Statistical Sampling Application Process

For your convenince, I have attached an MS Word file containing examples of statistical analysis tests, including the steps in the statistical sampling application. I have also added additional material regarding the statistical sampling process which should be useful in gaining a better understanding of the subject matter. For example, how population and sample definition fit into theoverall auditing process.

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#### Solution Preview

For your convenince, I have attached an MS Word file containing the text below. In addition to answering your original questions, I have also added additional material regarding the statistical sampling process which should be useful in gaining a better understanding of the subject matter. For example, how population and sample definition fit into theoverall auditing process.

Statistical Sampling Application Process

The steps in a statistical sampling application, whether manual or computerized are for auditors the same:

1. Determine the Test Objectives - (1) to test the reasonableness of assertions made about a financial statement or (2) to develop an estimate of some amount.

2. Define the Population - the selected sample population must be appropriate for the audit objectives being tested because sample results can be projected only to the population from which the sample was selected.

3. Define the Sampling Unit - derived from items which make up the population.

4. Choose an Auditing Technique - selection of the appropriate sampling method to use for the substantive test.

5. Determine the Sample Size - Five factors must be considered in determining as correct a sample size as possible:

a. The variation within the population

b. The acceptable risk of incorrect acceptance

c. The tolerable misstatement

d. The expected misstatement

e. The population size

6. Determine the method of Selecting the Sample Items - drawing the sample in such a way that it offers as true a ...

#### Solution Summary

For your convenince, I have attached an MS Word file containing examples of statistical analysis tests. I have also added additional material regarding the statistical sampling process which should be useful in gaining a better understanding of the subject matter. For example, how population and sample definition fit into theoverall auditing process.