Judgmental sampling, Auditing

Judgmental Sampling

The Judgement sampling is where, auditor using his own experience and awareness of the client's business and situations selects the sample to be tested with no use of any mathematical or statistical equipments. Statistical sampling is the drawing of inferences around a large volume of data by an inspection of a sample using statistical techniques in its selection.

The benefits of judgment sampling:

  • The approach is fine understood and has been cultured by experience over several years;
  • The auditor is provided a chance to bring his judgement and proficiency into play. After all auditing is an exercise in professional judgement;
  • No special information of statistics is needed;
  • No time is wasted playing with mathematics;

 

Its disadvantages are:

  • It is not scientific;
  • It is extravagant and generally too large samples are chosen;
  • You cannot extrapolate the outcomes to the population as an entire as the samples are not representative;
  • Personal bias in choosing the sample is unavoidable;
  • There is no sense to the choice of the sample or its size;
  • The sample choice is so erratic that it cannot be said to have applied to all matter in the year;
  • The conclusions reached are generally vague.

 

Judgement sampling is yet the preferred technique by the majority of auditors and this is defended on the grounds which the auditor is weighing numerous pieces of evidence and is investigating many things at similar time that the entire procedure is too complex to be reduced to easy formulas.

Posted Date: 12/4/2012 5:08:37 AM | Location : United States






Your posts are moderated
Related Questions
Need for an Audit Whether you take an example for a modern large liability company, such we can clearly differentiate between those who control those funds the providers of fu

Audit of Holding Companies and Group Accounts Authoritative documents are as: The Companies Act Cap 486 IAS 27 IAS 28 IAS 31 IFRS 3 ISA 600 r

The management of a newly incorporated company is unsure as to the need for an audit. Your services have been requested to explain to management the concept of auditing. Requir

Information in the Fixed Assets Register The register can obtain the following information: i. Fixed asset number. ii. The cost and the date of purchase. iii. Descrip

Financial Institutions and Banks - Audit Situations Financial Institutions Because of the recent collapse of many financial institutions, this is still a heavily regu

Action if Management Refuses to Provide Representations If management refuses to provide a representation that the auditor considers essential, this constitutes a scope restric

Pending Litigation - Audit Process Since of the inherent uncertainty, in calculating the outcome of legal actions so this is an especially difficult area for the auditor. Seve

Plz assist me with these questions The auditors for Weston University are conducting their audit for the fiscal year ended December 31, 2011. Specifically, the audit firm is now

State four factors considered determining sufficiency of audit evidence

Questionable Payments In some countries, business is often gained by bribing ministers or public officials or officers of companies or firms with whom one wishes to do business