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







Related Discussions:- Judgmental sampling, Assignment Help, Ask Question on Judgmental sampling, Get Answer, Expert's Help, Judgmental sampling Discussions

Write discussion on Judgmental sampling
Your posts are moderated
Related Questions
Amounts Derived From Financial Statements Please note here the auditor is interested in preceding year's evidence since 1. The Companies Act states such corresponding amounts

Auditor's Duty - Audit Process The auditor has a responsibility to express a thought on the truth and fairness and compliance along with legislation, of the accounts. The valu

Auditors Responsibilities with regard to related parties ISA 550 Related Parties states which the auditor should perform audit process designed to find sufficient suitable

Managements interest in the accounting system Management needs complete and accurate books of accounts because: There is no other way the business can be controlled; Rec

Non-Adjusting Events - Audit Process Non-adjusting events are those that are indicative of conditions such arose than the balance sheet date as a decline in the market price o

In previous times, the Kings used to hear their accountants narrate the accounts verbally. Though, as the complexity of the accounting function grew, require was felt to thoroughly

#Fortex Limited, the meat processing firm, was formed in 1985 from three smaller companies. In 1993, however, after a few years of spectacular growth, the company collapsed. a) S


Audit Risk and Business Risk We saw in earlier studies that audit risk is often categorized as the product of inherent risk, control risk and detection risk. Auditors should

Case Study: You have commenced work as a graduate auditor with a well established audit firm. The firm has a wide client base, which includes some of the largest companies in t