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
if a proxy is voted as per his judgement other than member prescribed to him... what is the action to be taken?

Accounting Treatment Prescribed by IAS 38 IAS 38 prescribes the accounting treatment about to intangible assets, except: a) Intangible assets which are under the scope of a

a. Discover Fifty strengths and Fifty weaknesses after conducting an internal audit of a company. b. What procedures could then be used to determine the most important of these?

Pension Funds - Specialized Audit Situation Pension funds are set up through companies or another organization: (a)  To retired employees to administer the pension payable

Insurance Companies Authoritative documents involved as: The Insurance Act The Companies Act IFRS 4 Insurance Contracts The major legislation governing insu

Definition of Auditing According to International Standard on Auditing (ISA) objective and common principles governing an audit of financial statements, the purpose of a financ

You are just appointed as the Trainee Accountant of the Compaq Computing Sdn Bhd - the newly established company. The manager is facing difficulties in maintaining the manual accou

IAS 27 - Audit Process IAS 27 applies to the presentation and preparation of consolidated financial statements for a group of entities within the control of a parent. It as w

Question: Part A (i) List and define five audit procedures for obtaining audit evidence. (ii) Why is it necessary to obtain corroborating evidence for inquiry and obser

Litigation and claims ISA 501 Audit Evidence - Additional Consideration for exact Items requires such auditors should carry our process to become aware of any material litig