In short
Classical variables sampling uses the normal distribution to estimate the dollar amount of an account or of misstatement in it. Methods include mean-per-unit, difference and ratio estimation.
Key takeaways
- It suits populations with many expected misstatements and with zero or negative balances.
- Sample size depends on the population's estimated standard deviation.
- Monetary unit sampling, by contrast, favors large items and works best when few misstatements are expected.
Where it's tested
AUD: Audit Sampling — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
In a test of controls, the tolerable deviation rate is 5% and the computed upper deviation rate based on the sample is 6.2%. What should the auditor conclude?