An audit sample is the application of audit procedures to less than 100% of the content of items in an account balance or business transactions. When it is formed, the auditor can select everything (continuous sampling), specific or individual elements. Continuous verification in many cases is not rational and appropriate. Therefore, most often it is carried out on private elements.
In determining the appropriate method for selecting elements for analysis, the auditor should correctly assess the goals set for him, the general population and the size of the forthcoming sample.
The audit sample consists of the following stages:
- determination of the selection method;
- determination of volume, sampling;
- execution of the main audit procedure in relation to the selected material;
- analysis of the results, their distribution to the general population.
The audit sample begins with the definition of the accounting area and specific tasks that need to be addressed in that area. Typically, these goals are to identify violations that may affect the reliability of the statements (financial, accounting).
The mandatory implementation of all control procedures, such as the correctness of the compilation of primary documents (contracts, accounts, invoices, etc.), coordination with the management of all ongoing business operations, accompanied by the expenditure of funds for the acquisition of material values specified in the documents, is checked. The auditor should establish the degree of timeliness and completeness of the reflection of operations in the financial and accounting statements.
A population is all documents or business transactions that need to be verified. The audit sample is the basis for the analysis of the totality of financial documentation. Based on the results of this analysis, an audit report is subsequently generated . If the selection is made from documents for the first half of the year, then the conclusions will apply, respectively, to the general set of documents for this period (and not for the entire financial year).
The method by which the audit sample is conducted is determined using the method of stratification. It is understood as the process of dividing the general population into subparts (subsets), which consist of elements having the property of homogeneity (having common characteristics).
When determining the sample size, it is necessary to take into account its risk, the level of permissible and expected errors.
The risk of sampling means that the auditor's report based on it may differ from that made on the basis of an analysis of the entire population.
A permissible error is the possible maximum distortion of the data in the general population, expressed in monetary terms, which does not lead to a significant distortion of the statements. The allowable error size is determined when planning the audit.
The expected error is called the predicted by the auditor, which should be present in the aggregate.
The audit sample should be representative (representative), which means that any element of the general population may have the opportunity (equal probability) to fall into the sample.
The main methods are the following: random, unsystematic and systemic selection.
A selective audit study concludes with an analysis of the deviations identified during verification and their distribution to the general population. An absolutely representative sample is practically impossible; there is always the possibility that, based on the results of actions taken by a specialist, an incorrect opinion will be drawn up due to audit risk .