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
why are the figures presented to an auditor not sufficient for absolute reliance

Problem: "If the auditor wishes to place reliance on internal control,he should ascertain and evaluate those controls and perform compliance tests on their operation" (a) De

Techniques of obtaining evidence ISA 500 mentions them as: (a) Inspection of records or documents, (b) Inspection of tangible assets, (c) Observation, (d) Inquiry, (e) C

Permanent Audit File The permanent audit file might include, inter alia: a) A copy of the enterprise's statutes and other legal or statutory documents governing the enterpri

Business Risk Approach This approach requires the auditor to determine what are the very important business risks which the client faces. This line of approach both helps the c

Comparison of the Negative and Positive Methods Negative Method According to this method of circularisation, the customer is asked to communicate only when he does not ag

The core principles of financial internal control are explained here: accounting and financial operations can be separated and the main purpose is the handling of cash and the copy

Question 1: What do you meant by Proactive Project Management? Define Proactive Project Management Bring out significance of Proactive Project Management with an exa

Accounting Principles - Intangible Assets IFRS 3 prescribes the financial reporting through an entity whenever it undertakes a business combination. A business combination is

Goodwill and Fair Value The main points the auditor needs to verify for any goodwill arising in the accounting period are as follows: (i) Examine the procedure used to find