Conformance Analysis of Population Means under Restricted Stratified Sampling
Risk based auditing has recently been promoted by national and international auditing standards, e. g., SAS 10 through SAS 111, ISA 315 and ISA 330, IDW PS 261. These schemes have created a broadening demand for stochastic methods of risk quantification and risk control in the auditing community. In particular, risk based auditing requires the specification and control of the detection risk, i. e., the probability that the auditor erroneously approves the conformance of the financial statements of the audited entity with the de facto financial status. Confronted with large volumes of accounting and inventory data, auditors are interested in sampling based methods of conformance testing. Customary sampling schemes are not completely in line with the requirements of conformance testing in auditing. The paper introduces restricted stratified sampling as a viable scheme for auditing purposes.
KeywordsConformance Analysis Restricted Sampling Enterprise Resource Planning Audit Standard Sales Transaction
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