AUDIT SAMPLING Meaning and
Definition
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Audit sampling refers to the process of selecting a subset of items or transactions from a larger population for examination and evaluation by auditors. It is a crucial method used in auditing to obtain sufficient and appropriate audit evidence to reach conclusions about a population's characteristics.
In the realm of accounting and auditing, a population represents the entire set of items or transactions that auditors wish to investigate. However, due to time and cost constraints, it is often impractical or unnecessary for auditors to examine every individual item within a population. Therefore, audit sampling is employed as a practical and efficient approach to assess the population by selecting a representative sample.
The purpose of audit sampling is twofold: to provide auditors with a reasonable assurance that the sample selected is representative of the entire population, and to allow auditors to draw valid inferences and make conclusions about the population based on the results obtained from the sample.
The selection of a sample involves careful consideration of various factors, such as the objectives of the audit, the characteristics of the population, and the level of risk associated with the audit engagement. Statistical techniques are often employed to determine an appropriate sample size and to guide the selection process, ensuring that the sample is both reliable and representative.
By using audit sampling, auditors can effectively and efficiently gather sufficient evidence to form an opinion on the fairness and reliability of financial statements, providing users of the audited information with a reasonable level of assurance.
Etymology of AUDIT SAMPLING
The word "audit" originates from the Latin word "audire", which means "to hear". In the context of auditing, it refers to the examination of financial records and statements to ensure accuracy and compliance.
The term "sampling" comes from the verb "sample", which comes from the Middle French word "essampler" and the Latin word "exemplum". Essentially, it means to take a small portion or representative selection from a larger group or population.
Combining these two terms, "audit sampling" refers to the practice of examining a subset of a company's financial records and transactions to draw conclusions about the overall population and assess its integrity.
