Exhibit 12-4

Abernethy and Chapman

SAMPLING FOR VARIABLES DIFFERENCE ESTIMATION
Client:
Form Completed By:
Audit Area:
Date of Testing:

Year Ending:

(1) State the objectives of the audit testing:

(2) Define the population:

(3) Define the sampling unit:

(4) Specify the acceptable level of risk for incorrect acceptance and identify the confidence
coefficient (Z value) for this percentage:

(5) Specify the acceptable level of risk for incorrect rejection and identify the confidence
coefficient (Z value) for this percentage:

(6) Specify a tolerable error for this population:

(7) Specify a point estimate of the population error:

(8) Compute appropriate sample size:

(9) Indicate the method used to draw random sample:

Recompute the standard deviation, using the entire sample selected:

Calculate the average difference between within the sample and extend this figure to entire
population:
Determine the precision interval. Show the formula being used and identify each element
within this formula (all computations should be attached):
Identify the upper and lower confidence limits of the population, based on precision interval
and the average difference of the sample:
Indicate whether the upper and lower confidence imits lie entirely within the tolerable error
parameters:
Recommendations: