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1. Estimation sampling for variables
This method seeks the estimate the total value of some population e.g. total value of debtors,
stock or loose tools. The procedure is to extrapolate estimate or form an opinion using the facts
that are valid for one situation (sample) supposing that they will be valid in the new situation. This
estimate can be compared with the book value and if any difference is within the materiality limits
pre-established, the auditor has evidence for the book value of the item.
2. Estimation sampling for attributes
This method seeks to estimate the proportion of a population having particular characteristic e.g.
overdue debts or damaged inventory.
3. Acceptance sampling
This method seeks to discover the error rate in a population to determine a maximum error rate.
Its uses include;
i. Whether a control can be relied upon. If non compliance is greater than the acceptable
rate, the control will not be relied upon and other audit tests will have to be applied.
ii. Used to test whether stock calculation can be relied upon. If the error rate is greater
than some acceptable proportion, the auditor will have to request the client to redo the
calculations.
4. Discovery sampling
This method extends acceptance sampling to an acceptance level of zero. E.g. a system with controls exists in an investment trust company to ensure that all bonus issues are recorded. Even if one bonus has not been recorded, the auditor will be unable to accept the controls and will have to seek other evidence. This method requires a large sample. A form of discovery sampling is monetary unit sampling.
Wilfykil answered the question on April 12, 2019 at 05:24
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