The importance of sampling in audit field work
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(Fieldwork is very important when you consider that this is where you will conduct all of your actual testing of account balances, transactions, and managements assertions. Remember that professional skepticism is very important when you are working on an audit as an independent auditor. The auditing standards require that an audit be designed to provide reasonable assurance of detecting both material errors and fraud in the financial statements. In order to do this, we must portray an attitude of professional skepticism in all aspects of the engagement - remember to keep in mind the phrase "trust but verify". Sampling is a very efficient and useful audit technique that allows you to take a smaller test sample than the entire population and then often extrapolate from that difference to the entire population to get a good number to adjust the overall balance too. However, this is not always necessary, sometimes you are just testing to make sure that the actual value is not materially misstated. There are a variety of sampling techniques such as random/haphazard, systematically, trying to obtain a certain level of coverage by selecting high dollar values, etc. Sampling makes up a very significant part of audit fieldwork, because most of the time it would be inefficient and way to expensive to test each and every balance/transaction that a company made over the year(s).)
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This has always been a central theme in audit work and remains a key element. Auditors must be trained specifically to ...
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