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VANDA INSTITUTE: MASTER AUDIT

STATISTICAL SAMPLING

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 SAMPLING TEST PLAN - SAMPLE SIZE

A B C
10 IF YOUR SAMPLE TEST PLAN IS:
11 Population Size: 5,763
12 Planned Tolerable Rate( Sampling Error) 5.0%
13 Risk of Assessing Control Risk Too Low 95%
14 Deviation Rate(Expected True or Error Rate) 3.0%
15 THEN THE SAMPLE SIZE SHOULD BE: 44
SAMPLING TEST PLAN - SAMPLING ERROR

IF YOUR SAMPLE TEST PLAN IS:

Population Size: 5,763
Sample Size: 30
Confidence Level: 95%
Deviation rate Expected (true) Error Rate: 6.6%
THEN THE SAMPLING ERROR WILL BE: 8.9%
 SAMPLE SIZE CALCULATION - DOLLAR UNITS

IF YOUR SAMPLE TEST PLAN IS:

Population Book Value: 250,000.00 Required
Maximum Allowable Error: 5.0% Maximum Tolerable Error Auditor Will Accept in Pop.
Confidence Level: 95% 90%, 95% or 99%
Expected or Actual Number of Errors: 0 Max = 20
THEN THE SAMPLE SIZE SHOULD BE: 60 Random Samples Only
SAMPLE SIZE CALCULATION - DOLLAR UNITS
UPPER CONFIDENCE BOUND FOR MEAN ERROR - DOLLAR UNITS

Sample Size: 60 Dollar Units - Random Samples Only

Confidence Level: 95% '90%, 95% or 99%
Number of Dollar Unit Errors: 3 Max = 100
A/R or INV?: A/R Enter "A/R" or "INV"
UPPER BOUND OF ERROR WILL BE: 4.92% Maximum Tolerable Error Acceptable to Auditor

ERROR
TAINTING
VALUE
 CONCEPTS

DEFINITIONS
Appraisal of sample results is necessary to determine the sampling precision achieved. This is
because in order to calculate the sample size it was necessary for the auditor to estimate the rate of
occurrence (expected error rate) in the field.
Acceptance Sampling - A method of sampling in which if for a given sample size, if not more than a
certain number of errors is found, then the population is considered acceptable, otherwise the population
is rejected.
Attributes Sampling - Estimation sampling that establishes the frequency of occurrence of some kind of
event or type of item.

Cluster Sample - Groups of items (not individual items) are drawn from the population at random points.
Confidence Level - The probability (expressed in %) that the value obtained from the sample will in fact
depart from the true population value by no more than the amount of the sample precision.
Discovery Sampling - Used to determine the sample size which will give any desired degree of
assurance that at least one occurrence of a particular event will occur in the sample when it happens with
at least a certain frequency in the population.
Estimation Sampling - Used to answer the question of how many or how much.
Expected Error Rate - In Attribute Sampling, used in calculating sample size. Auditor's estimate of the
true rate of occurrence of the event (error) in the population being tested. This is the expected error rate
anticipated by the auditor.
Judgment Sample - Any sample not meeting the criteria of a probability sample.
Maximum Tolerable Error Rate - The maximum true rate of error in the universe with which the auditor
can be comfortable. It is the sum of the expected universe error rate and the upper limit of the sampling
precision.
Multistage Sample - A sample taken on several levels, i.e., a random sample of branch offices and then
a random sample of records at each branch selected.
Population - The totality of observations from which the sample was drawn. Otherwise known as
universe or field.
Sample - The observations drawn from the entire group.
Sample Precision - Error in a statistical sample. Usually expressed as a +/- percentage in relation to the
sample result. Denotes the degree to which the sample result (statistic) reflects the true population
parameter (e.g., error rate).
Standard Deviation - A measure of the dispersion of values about the arithmetic mean, specifically the
average of the distance of all values from the arithmetic mean.
Statistic - The value of the characteristic (average, percentage, proportion of some type, etc.) derived
from the sample.
Statistical Sampling - A sampling method that establishes the required sample size objectvely as well as
appraises the sample results objectively. The sample taken is referred to as a probability or random
sample.
Stratefied Random Sample - Items are segregated into separate segments (or strata) of the population
and any item within a segment has an equal probability of being selected.
Systematic Sampling - A method of obtaining a probability sample consisting of drawing every nth item
beginning with a random start. Otherwise known as interval sampling.
Unrestricted Random Sample - All items in the population have an equal probability of being selected,
without segregating any portion of the field.
Variables Sampling - Estimation sampling that provides an estimate of an average or total value.

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 STANDARD DEVIATION CALCULATION

Standard Deviation is: #DIV/0!

 RANDOM NUMBER LIST

6 6 4 1 1 4 5 6 2 8
7 8 3 2 1 6 8 2 8 7
4 4 7 8 3 2 2 6 8 6
7 3 5 6 7 3 7 4 7 8
3 8 3 7 4 1 9 5 2 5
3 6 5 8 3 4 9 8 8 3
2 4 6 3 1 2 3 7 4 2
1 8 7 6 4 1 2 2 2 5
4 2 5 5 7 9 2 9 5 4
9 6 3 1 8 6 2 2 2 4
5 5 6 5 3 2 2 2 7 1
5 9 6 1 5 6 5 1 7 5
7 3 1 3 4 9 2 9 7 2
4 6 5 9 5 4 2 7 8 5
5 4 8 2 8 9 3 5 3 6
4 2 5 5 9 9 9 6 5 5
9 9 2 8 3 6 5 4 4 3
3 6 4 3 1 3 3 8 1 5
7 8 1 3 1 1 6 1 4 9
9 5 5 5 7 2 5 7 7 8
7 3 5 6 2 9 7 5 8 8
7 2 5 2 4 3 3 3 9 7
3 4 8 3 9 6 2 4 9 5
4 5 9 1 2 2 6 2 3 6
1 6 6 1 5 5 7 5 4 7
2 4 8 7 1 8 8 9 5 6
3 4 1 4 2 6 7 3 7 4
7 5 6 7 2 5 8 7 3 2
4 8 2 3 6 3 9 7 3 2
4 9 6 1 3 2 5 1 2 8
6 5 3 1 8 4 5 4 3 3
1 3 7 5 9 5 1 7 1 7
1 6 5 2 3 1 9 8 1 2
8 6 1 8 8 5 5 4 7 6
3 9 2 1 4 7 2 6 3 8
7 6 2 4 7 4 2 9 5 3
3 1 2 8 2 4 2 2 7 9
5 9 3 9 9 4 1 3 3 6
9 5 1 6 8 8 3 4 4 1
9 8 3 4 3 9 5 2 4 7
8 7 1 6 7 2 1 8 2 5
6 6 4 2 6 1 9 1 4 9
3 5 6 1 6 4 6 9 1 8
2 2 8 7 6 7 9 2 5 8
2 8 1 3 8 1 9 7 3 8
4 7 9 2 7 6 8 7 8 6
6 4 6 9 5 6 6 3 4 2
3 8 8 2 4 9 3 8 3 8
8 2 6 9 6 4 2 6 6 9
5 5 6 5 7 7 4 2 6 8
7 6 3 3 1 8 7 4 5 6
5 6 6 2 8 6 4 9 4 2
5 4 5 2 3 3 1 8 4 6
9 6 2 2 9 8 6 4 7 4
4 7 2 6 2 2 7 6 9 7
1 2 1 3 3 1 7 9 6 5
1 1 1 6 3 3 1 3 1 4
5 6 4 4 7 8 7 3 3 7
3 6 5 9 3 5 2 2 8 2
6 2 5 8 7 7 3 9 9 3
1 4 6 4 9 6 5 1 7 3
8 7 1 2 5 5 5 5 2 6
8 4 3 1 9 5 2 8 4 5
7 5 5 2 5 1 5 8 3 2
4 1 3 8 2 3 9 4 8 2
 RANDOM NUMBER LIST

7 3 5 6 4 3 7 1 4 3
7 4 8 6 1 4 7 4 6 7
9 8 1 6 1 6 3 7 2 6
3 1 2 7 7 2 3 2 4 6
8 2 6 3 5 1 9 9 4 1
2 5 2 9 9 6 6 8 8 8
7 7 5 1 9 4 7 7 7 9
4 6 7 6 5 2 2 9 8 3
7 3 7 4 4 6 6 4 5 8
8 1 7 8 8 1 8 8 2 4
3 1 1 9 3 3 6 3 6 2
3 3 2 5 8 6 9 5 2 1
9 2 6 2 8 7 9 3 9 9
4 2 2 9 4 6 3 4 9 9
7 3 4 3 2 1 7 6 6 7
1 5 6 9 7 6 5 9 1 8
9 5 8 7 6 7 3 5 4 4
5 2 9 4 7 6 9 5 9 8
5 5 3 3 6 6 8 3 5 7
8 4 9 2 6 7 4 9 7 7
6 1 1 3 3 1 8 7 7 4
7 9 2 4 6 8 7 3 8 4
2 4 3 8 1 3 9 8 3 5
6 5 3 3 4 7 1 2 1 4
5 3 4 5 8 2 2 8 3 6
4 5 3 8 2 3 8 8 5 6
3 7 7 7 8 5 1 5 9 6
3 5 1 9 2 7 9 8 7 4
4 9 9 5 7 2 6 7 7 3
2 6 3 8 7 3 2 3 3 4
8 5 6 8 7 2 5 2 3 9
1 2 1 3 4 6 3 8 9 6
1 8 3 6 6 1 2 5 2 4
6 3 1 6 5 8 5 8 4 9
5 7 6 7 5 5 2 6 4 1
6 4 1 8 4 9 7 8 6 7
 Sample Size Calculation - Variables Sample

IF YOUR SAMPLE TEST PLAN IS:

Population Size (No. of values): 42.00 If unknown, enter 0.
Sampling Error (In dollars, days, etc.): 14,000.00 Range of error (+/-) of the sample result - keep it small.
Confidence Level: 95% 90%, 95% or 9
Estimated Standard Deviation 9.00 Worst case population error rate expected.
THEN THE SAMPLE SIZE SHOULD BE: 0 Random Samples Only
 SAMPLING ERROR CALCULATION - VARIABLES SAMPLE

IF YOUR SAMPLE TEST PLAN IS:

Population Size (No. of values): 5,000.00 If unknown, enter 0.
Sample Size: 94 Random Samples Only
Confidence Level: 95% 90%, 95% or 99%
Estimated Standard Deviation: 50.00 From pilot sample of 50 items.
THEN THE SAMPLING ERROR WILL BE: 10.01 Range of error (+/-) of the sample result - keep it small.
SAMPLING ERROR CALCULATION - VARIABLES SAMPLE
 SAMPLE SIZE CALCULATION - DISCOVERY SAMPLE

IF YOUR SAMPLE TEST PLAN IS:

Population Size: 5,763 Required - Amounts up to 50,000
Level of Assurance: 95% 90%, 95% or 99%
Rate of Occurrence: 1.0% Required - Up to 5%
THEN THE SAMPLE SIZE SHOULD BE: 291 Random Samples Only