AUDIT STANDARD No.6 – AUDIT SAMPLING
Audit Standard No.6 defines an audit sample. It sets out the
requirements to use audit samples, how to design sampling methods
and select samples, and how to evaluate results. This standard shall
be applied in all types of audit carried out by the National Audit
Office, when sampling is used.
1. Definition of audit sample
An audit sample is part of a certain general population selected by an
appropriate method. It enables reliable audit evidence to be obtained in order
to reach a conclusion about the general population and to fulfill the audit
objectives.
2. Requirements of an audit sample
The audit sample should comprise sufficient number of items and to be
representative in order to draw reliable conclusions about the general
population. The degree to which an audit sample is representative depends
on the homogeneity of the population, the probability of each item in the
population being selected and on the sample size.
2.1 Sample size is the number of items selected from the general
population that will be audited. It depends on the variability in the
population, the maximum acceptable error and the level of assurance.
2.2 Variability is the difference between the separate items in the
population. The more variability, the larger the sample size required in
order to obtain audit results with a sufficient level of assurance.
2.3 Maximum acceptable error is the maximum acceptable difference
between an item in the sample tested (average value or share of the
items which possess the researched characteristics of a given
alternative quality sign) and the population at a given level of
assurance. The lower the acceptable error the larger should be the
sample size.
2.4 Level of assurance is the probability that the sample tested will fall
within the confidence interval of the whole population. The higher the
level of assurance the larger should be the sample size.
2.5 Confidence interval is the limit, within which the sample tested can
vary at a certain level of assurance.
3. Designing audit samples
An audit sample can be obtained using statistical and/or non-statistical
methods:
3.1 Statistical methods are based on the calculus of probability and
allow the use of mathematical approaches to determine the sample
size and confidence interval and, based on this, to draw appropriate
conclusions about the general population.
3.2 Non-statistical methods are based on a random or systematic
selection of sample items from a certain population depending on the
judgement of the auditor. While using these methods a reasonable
conclusion about the population could be drawn, but the sampling
results and the level of assurance cannot be precisely measured and
assessed.
4. Audit sample selection methods. An audit sample is selected
using the following methods:
4.1 Random (lottery) sampling: all items in the sample are
selected through a random selection (lottery) by use of random
number tables or by generating random numbers from computer
programs.
4.2 Mechanical (systematic) sampling: all items in the sample are
selected using a constant interval between items in the population
(sampling interval) and a randomly selected first item.
4.3 Regional (stratified) sampling: the population is sub-divided
into homogenous groups according to an appropriate indicator of the
transactions i.e. the areas of the transactions, time periods, specific
types of transaction etc. 4.4. Serial (nest-like) sampling: the
sample includes items concentrated in certain limits (towns and
villages; organisations etc), rather than the whole population.
5. Evaluation of sampling results.
5.1 Having carried out all planned audit procedures an evaluation of
the sampling results should be made, analyzing each error detected in
the sample. The expected maximum error rate and its value for the
general population and the confidence interval should be calculated.
5.2 The sampling results are acceptable when the whole is below the
materiality threshold. When some sample errors detected are beyond
the upper limit of the confidence interval, the sample size or level of
assurance might be increased, as well as additional control procedures
in order to reach the necessary level of assurance.
5.3 The analysis and assessment of the sample results together with
the results from other control procedures allow to make conclusions for
the general population with a sufficient level of assurance and to
express an appropriate audit opinion.
6. Concrete procedures and actions undertaken when evaluating the
sampling results are defined in the Guidelines for implementation of this
standard.
The standard has been adopted at a Board Meeting of the National Audit
Office with Protocol No 30 dated 20.06.2002.
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