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
Related Party Transactions Related party transactions-a transfer of obligations or resources among related parties, regardless of whereas a price is charged. A party is rel

Verification Procedures - Investment Verification actions should follow the common approach outlined in favor of tangible noncurrent assets. Conversely the following particula

Reserves - Audit Process Movements in reserves need disclosure in the balance sheet, the loss and profit account, the director's reports or in the notices to the accounts. The

online exam in Auditing class. the exam will be about 2 hr. Thank you

Control Problems in Charities 1. Door to door collections : Volunteers should be mattered along with numbered boxes, the boxes should be sealed, and the boxes should be

the reliabity of audit evidence defers with source is that true

Reliability - Sources of evidence Reliability of audit evidence is influenced through its nature and its source and since it is dependent upon the specific circumstances, we c

Required: Describe a complete audit program for collecting relevant evidence for the audit of the estimated warranty liability. Approach: Develop specific assertions related to

In June 2004, Feltex Carpets Limited raised NZ $254 million in an initial public offering. Twenty seven months later the company was in receivership, its share price having collaps

Key Audit Areas Key audit areas in detail (a) Ascertainment of creditors and debtors:   Insurance companies do not keep their personal ledgers in such a way as to prod