Auditing and assurance revision question and answer

Auditing and Assurance Revision Questions and Answers

Distinguish between the following:

a.Judgmental sampling and Statistical sampling

Judgmental Sampling Statistical Sampling
Traditionally, auditors have carried out selective checking what is popularly called the test checking or judgmental sampling approach. It consists of selecting and checking a predetermined proportion of transactions on the basis of the auditor‟s   own   judgement   and  without

using statistical procedures. Any sampling

Whereas, Statistical sampling means any approach having characteristics of random selection of a sample and use of probability theory to evaluate sample results, including measurement of sampling risk.


method that does not measure the sampling risk can be termed as judgmental sampling.
It is not used mechanically. This approach should involve a careful consideration of the circumstances of each case, on the basis of which the auditor should determine the items to be test checked, select sample, examine them and evaluate the results in the light of his knowledge of the business of the enterprise. It helps the auditor in determining the size of the sample scientifically, reduces the chance of biasness in selection of the sample and can give results with a calculated degree of risk.

 Audit program and Audit note book

Audit Program Audit Notebook
This is a list of the audit procedures to be applied in an audit in the given circumstances along with proper instructions. Thus, an audit program contains the description of the specific audit procedures to be performed in respect of different aspects to be covered, the extent to which those tests will be performed and timing of such tests. It also lays down the responsibilities of various members of the audit team for carrying out different tasks. Audit note book is a bound book containing the audit program, significant audit observations, objections, queries etc.

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