Then Discuss the importance of selecting a sample that may be considered representative of the

entire population. Consider these questions: What is the first step in the process of selecting a
sample? Are there occasions where the sample selected does not represent the entire
population?

Then, post on how auditors evaluate risk in relation to sample size. Do risks change depending on
the size of the sample? What happens when auditors find misstatements that are above the
expected deviation rate?

In normal sampling techniques the following is the 1st step to be is followed. (a)

Identification of the population which has to be sampled. In case of audit sampling the

population is basically the accounting data which is required to be established. This is

basically very crucial as the whole of the conclusions are depending upon the input. The

data is to be both relevant and of appropriate size.

The sample selected does not represent the entire population in case where the

material information is checked upon. They are either material transactions or material

subsidiary balances. Material transactions involves certain transactions like account

receivables that are sometimes misstated. On the other hand material subsidiary

balances include certain capital account balances.

The size of a sample obligatory to give adequate audit substantiation depends on both

the objectives as well as the competence of the sample. For a specified objective, the

effectiveness of the sample transmits to its design; one sample is further proficient than

another if it can attain the equivalent objectives with a lesser sample size. On the whole,

careful design can create more proficient result.

Sampling risk varies contrarily with sample size: the smaller the sample size gets, the

greater the sampling risk.

If the expected deviation rate is incongruously high, the auditor will usually choose not

to carry out tests of controls. For tests of information, the auditor makes an appraisal of

the probable misstatement in the population. If the expected misstatement is high, all

the items are inspected or a large sample size might be used.