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
Explain appropriate audit procedures you would apply in verification of cheque payments.

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

Long Term Contracts - Audit Process The authoritative document with reference to long term contracts is IAS 11: Construction Contracts and IAS 18: Revenue Recognition, and ISA


Issues in Audit of Intangible Assets The two key issues in such audit of intangible assets are: (a) Recognition of intangible assets The audit problem here is to mak

Existence of Debtors - Audit Process The easiest technique to establish the existence of a debtor is to enquire the debtor if he exists. This is done through use of a practice


Valuation and Income - Verification Procedures Valuation Valuation of listed securities is easily conformed along with suitable financial publications. Directors' valua

Party Disclosures used by IAS 24 IAS 24 utilized the following related party disclosures that 1. Nature of relationships between subsidiaries and parents, even whethe

Advantages of Fixed Assets Register There are several advantages if the register properly maintained: a) There is an independent record of all fixed assets showing particul