Sampling
The auditing technique of examining a representative subset of transactions or account items to form conclusions about the entire population when testing all items is impractical.
Sampling
The auditing technique of selecting and examining a representative subset of transactions or account items to form conclusions about characteristics of the entire population when testing all items would be impractical or inefficient.
For instance, rather than examining all 25,000 annual sales transactions, an auditor might select a sample of 100 transactions using statistical or judgmental methods, test them for appropriate recording and authorization, and project the results to the entire population, potentially identifying systemic issues.
Two primary sampling approaches exist: statistical sampling (using probability theory to quantify sampling risk) and non-statistical sampling (relying on auditor judgment for sample size and selection). Sample size determination considers factors including population size, expected deviation rate, acceptable risk level, and the assertion being tested. Sampling carries inherent risk—examining a different sample might yield different conclusions. After testing, auditors evaluate results by projecting deviations to the population and considering whether identified misstatements, when combined with other audit findings, exceed materiality thresholds. Well-designed sampling balances efficiency with effectiveness by focusing detailed testing on representative transactions.