Question

A. Provide your answers to the following questions regarding internal auditing and sampling

1. List the steps involved in attribute sampling.

2. What is meant by "sampling risks" and what is its impact on audit findings?

3. Identify and define the factors that affect the size of an attribute sample.

4.  Explain how the purpose of statistical sampling in tests of monetary values differ from the purpose of statistical sampling in tests of control activities.

B. Discuss a situation within Payroll or Accounts Payable where data analytics could be used by an Internal Auditor. Briefly describe the information to be analyzed and what potential results would be expected? (i.e. How would the population of data be defined? What controls is being tested? What additional testing beyond data analytics, if any, would be required to reach an audit conclusion?).

Answer 1

steps involved in attribute sampling

1.Define the objective for audit

2.determine the deviation condition

3.define the population and selection technique

4.Determine the sample size

5.now perform the test of controls

6.interpret the results

answer to q.no 2

sampling risk means the risk that audtiors opinion or conclusion drawn may be different ,when the  audit procedures that were applied to the sample are applied to the entire population.

the impact is sometimes the auditors opinion bases on sample may be erroneous.

answer to q.no 3

following are the factors that effecting the size of the sample:

1.the margin or error or tolerable error that was set or defined by the auditor as per his professional judgement

2.variability of the population characteristics

3.confidence level