Video: Sampling Terms

This lesson covers various sampling terms used in audit sampling. The lesson begins with the explanation of actual sampling results and actual population results, highlighting the importance of understanding the differences between them. The lesson then discusses the expected deviation, tolerable rate, and projected error while emphasizing the significance of calculating accurate projections for potential differences between the population’s true value and the sample’s estimated value. The importance of a reliable sampling method is also addressed, along with the concepts of precision and standard deviation. Throughout the lesson, the central theme of ensuring that the sample is representative of the population is emphasized to ensure accurate and meaningful audit results.

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Video Transcript

Instructor: Nick Palazzolo

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some terms. We got about two slides of terms and we'll go through them. Now when we're talking about the actual sampling results, this refers to the results obtained from the sample of an audit population. We're going to see that there's a process just like this whole audit process, there's a whole process for sampling. That's going to involve assessing what you need to sample, it's going to involve at the end of it assessing the results of the sample. We've also got the actual population results, which this is the results obtained from the entire population being audited. We'll talk about the differences there. Again this relates to us just auditing a sample of the population rather than auditing the entire population itself. We've also got the expected deviation, also known as the expectations for the audit. This is the amount of variation that is expected between the sample results and the actual population results. This is for you to assess your sample and to see, oh okay our sample assessed five percent inaccuracy but in reality there was ten percent inaccuracy. Well that's not good and we'll talk about what happens in that case as well. We've also got our tolerable rate. This is the maximum accepted. This is quite similar to the tolerable rate of misstatement if we're talking about audit risk, we're talking about all of that in that formula in that lesson. Same concept here, it's the acceptable rate of deviation between the sample results and the actual population results. The actual rate of variance should not exceed this rate to be considered valid. Again if you are actually varying from the real results and that's greater than what you're saying is okay to vary, you've got a problem and you should not be

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