1. AUDIT SAMPLING: AN OVERVIEW AND APPLICATION TO TESTS OF CONTROLS DR. ZULKARNAIN BIN MUHAMAD SORI B. Acc (Hons.)(UPM), MSc. (UPM), PhD (Cardiff, UK), CA(M), MCMI(UK) ROOM: 08F1 TEL: 03-89467742, 89486188 (Fax) E-MAIL: zms@putra.upm.edu.my

2. LEARNING OBJECTIVES • Learn the definition of audit sampling • Learn the difference between sampling and other selective testing procedures • Understand basic sampling terminology • Learn the types of audit sampling • Learn the sampling requirements of ISA 530 • Learn how to apply attribute sampling to tests of controls • Work through an example of attribute sampling • Learn how to apply non-statistical sampling to tests of control

3. What you should know? • Sampling risk • Non-sampling risk • Selecting items for testing • Selecting all items • Selecting specific items • Audit sampling

4. What you should know? • Terminology • Sampling risk • Type I and Type II risks • Error and tolerable error • Sampling units • Allowance for sampling risk

5. What you should know? • Types of audit sampling • Non-statistical versus statistical sampling • Types of statistical sampling techniques • Attribute sampling • Monetary-unit sampling • Classical variables sampling

6. What you should know? • Steps in applying audit sampling • Designing the sample • Determining sample size • Selecting the sample • Performing the audit procedures • Evaluation of the sample results

7. Steps in an Attribute-Sampling Application • Designing • Determine the objective(s) of the tests of controls • Define the error or control deviation • Define the population • Define the sampling unit • Determine the sample size • Performance • Randomly select the sample items • Perform the audit procedures • Evaluation • Calculate the sample results • Perform error analysis • Draw final conclusions

8. What you should know? • Non-statistical Sampling for Tests for Controls • Determining the sample size • Randomly selecting the sample items • Calculating the sample results

9. THANK YOU