Statistical techniques-factors, Auditing

Statistical techniques

Factors to be taken into consideration before adopting statistical techniques:

a) The number of clients to whom it is appropriate because set up costs and training can be very high;

b) Large populations must exist as statistics is the science of large numbers;

c) Adequate controls must exist and the objective being to test them it is obvious that where no control exists then you cannot apply statistical sampling;

d) The populations being tested must be homogenous in materiality. They must also be homogenous in that the same system and controls must apply to each one of them. In other words they must be subject to the same treatment.

e) Too many variables cannot be tested at once;

f) Items must be separately identifiable; therefore sequential numbering is essential;

g) The error must be defined;

h) Materiality: the auditor must consider the total value of the population and any variances from it;

i) The risk factor: some items have more risk than others;

j) The availability of other evidence. If evidence can be obtained through other means, then statistical sampling may only be a top up.

Posted Date: 12/4/2012 5:16:26 AM | Location : United States







Related Discussions:- Statistical techniques-factors, Assignment Help, Ask Question on Statistical techniques-factors, Get Answer, Expert's Help, Statistical techniques-factors Discussions

Write discussion on Statistical techniques-factors
Your posts are moderated
Related Questions
Investment - Audit Process The investment is held for wealth generation that as interest and dividends on shares and capital growth and loan notice.  Recent investments are re

Wal-Mart Locate the 2009 Form 10-K for Wal-Mart in Appendix A and consider the following questions: 1. With respect to the report of the external auditors to "the Board of Directo

Factors Affecting and Controlling Occupational Health (i) Walking-Working Surface Workers must work or move on different surfaces while working. Such - surfaces are cha

(a) State the FIVE threats contained within Auditor's Code of Ethics and Conduct and for each threat list ONE example of a circumstance that may create the threat. (b) You a

Question : (a) Describe the following terms: 1) Forensic Accounting; 2) Forensic Investigation; 3) Forensic Auditing. (b) Explain the basic elements to consider for

Limitation of Audit Evidence The quantity and quality of evidence is constrained through the following factors as: Absolute proof is not possible; Some assert


Audit of Accounting Estimates An accounting estimate is described in ISA 540 Audit of Accounting Estimates as 'an estimation of the amount of an item in the absent of a precis

Responsibilities of the Auditor The Auditor has no duty for the prevention and recognition of fraud and error though the annual audit might act as a restraint. As explained