Attributes Sampling

Question 1

What is attributes sampling?

Answer 1

Sampling to test the effectiveness of internal control

Question 2

What is a deviation or occurence?

Answer 2

Error- based on binomial distribution of (“hit” or “miss”)

Question 3

How do you decide how a sample is selected?

Answer 3

Preferred approach is random selection- every item has the same odds of being picked

non-statistical: Block or haphazard

Question 4

How do you determine the sample size? What are the three key factors?

Answer 4

1) Risk of over-reliance (type II)- this determines what page to look at on AICPA table

This equals (1- desired confidence level)

2) Expected error rate
3) Tolerable error rate (precision)

ADDITIONALLY:

• Risk of under-reliance
• Population size (implicit)