# Chapter 15 sampling for tests

Sampling error simply means that the sample is not perfectly representative of the entire population. For both statistical and nonstatistical methods, the three main parts are: 1. Revising assessed control risk may be done if 1 or 2 is not practical and additional substantive procedures are possible.

The auditor uses the upper confidence limit to evaluate whether the sample result is acceptable or not. Using shipping document numbers, rather than the documents themselves, allows the auditor to test the numerical control over shipping documents, as well as to test for unrecorded sales.

## Test of controls

The sample size is referred to as the initial sample size because it is based on an estimate of the SER. This alternative should be followed only when the auditor has concluded that the original specifications were too conservative, and when he or she is willing to accept the risk associated with the higher specifications. C substitute two more checks to get to a sample size of Increase sample size. Notes: b. Check the price on other invoices that have the same product. The individual situation.

Examine the accounts receivable master file for subsequent cash receipt; examine sales invoices for other invoices to the same customer to determine if customer orders were attached.

The sampling unit for verifying the occurrence of recorded sales would be the entries in the sales journal since this is the document the auditor wishes to validate.

Analysis of exceptions is necessary even when the population is acceptable because the auditor wants to determine the nature and cause of all exceptions.

Estimated population exception rate EPER Terms: Factors to determine appropriate sample size Diff: Easy Objective: LO AACSB: Reflective thinking skills 34 Explain the effect on sample size of increasing each of the following: 1 tolerable exception rate, 2 estimated population exception rate, 3 acceptable risk of assessing control risk too low, and 4 population size.

The individual situation.

In a substantive test, the attribute is the absence of monetary misstatement.

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