REPRESENTATIVE SAMPLES

Representative samples is one in which the characteristics in the sample are approximately
the same as those of the population. This means that the sampled items are similar to the
items not sampled.

Nonsampling risk is the risk that audit test do not uncover existing exceptions in the sample.

Sampling risk is the risk that an auditor reches an incorrect conclusion because the sample is
not representative of the population.

Auditor have two ways to control sampling risk:

1. Adjust sample size

2. Use an appropiate method of selecting sample items from the population.

STATISTICAL VERSUS NONSTATISTICAL SAMPLING AND PROBABILISTIC

SAMPLE SELECTION.

Audit sampling method can be diveded into two broad categories: statistical sampling and
nonstatistical sampling. These categories are similar in that they both involve three phase:

1. Plan the sample.

2. Select the sample and perform the test
3. Evaliated test.

The purpose of planning the sample is to make sure that the audit test are performed en a
manner that provides the desired sampling risk and minimizes the likehood of nonsampling
error.

Statistical sampling differs from nonstatistical sampling in that, by applying mathematical

rules, auditor can quantify (measure) sampling risk in planning the sample (step1) and in
evaluating the result (step3).

Nonsttatistical sampling, auditors do not quantify sampling risk.

Probabilistic sample selection, the auditor randomly selects items such that each population
item has a known probability of being included in the sample.
Nonprobabilistic sample selection, the auditors selects sample items using prfessional
judgement rather than probabilistic method.

Nonprobabilistic (judgement) sample selection method include the following:

1. Directed sample selection

2. Block sample selection
3. Haphazard sample selection

Probabilistic sample selection methods include the following:

1. Simple random sample selection.

2. Systematic sample selection.
3. Probability propotional to size sample selection.
4. Stratified sample selection.

NONPROBQBILISTIC SAMPLE SELECTION MMETHODS

Directed sample selection auditors deliberately select each in the sample based on their own
judgmental criteria instead of using random selection.

Block sample selection auditors select the first item in a block, and the remainder of the block is
choosen in sequence.

Haphazard sample selection is the selection of the items without any conscious bias by the auditor.

PROBABILISTIC SAMPLE SELECTION METHODS.

Random sample every possible combination of population items has an equal chance of being
included in the simple.

Random numbers are a series of digits that have equal probabilities of occurring over long runs and
which have no identifiablepattern. A random number table has random digits in table form
numbered rows and colums.