Audit sampling presents a quandary. I believe strongly that auditors should use statistical sampling, yet surveys reveal that my students will rarely, if ever, use statistical sampling after they leave my classroom. In recent years, I have reduced my coverage of sampling to one class period – just enough to cover the basic concepts and terminology the students are likely to see on the CPA exam. I always make sure, at the end of the day, to present the Hall et al. BRIA research that shows the shortcomings of judgmental selection. The Hall et al. CPA Journal article summarizes their research in language students can read for themselves.
“Audit Sampling,” Janet Colbert, Internal Auditor (February 2001): 27-29. A basic overview of how auditors use sampling.
“Statistical Sampling Revisited,” Neal Hitzig, CPA Journal (May 2004): 30-35. An overview of sampling and a discussion of statistical vs. nonstatistical sampling.
“How Reliable Is Haphazard Sampling?” Thomas Hall, Terri Herron & Bethane Jo Pierce, CPA Journal (January 2006): 26-27. Two recent research studies confirm that haphazard sampling is susceptible to selection bias and may not yield representative samples.
“Monetary-unit Sampling Using Microsoft Excel,” Bruce Wampler & Michelle McEacharn, CPA Journal (May 2005): 36-40. Students may download an Excel spreadsheet that can be used to select and evaluate monetary-unit samples.
“That’s the Way the Cookie Crumbles: An Attribute Sampling Application,” Stefanie Tate & Barbara Murray Grein, Accounting Education: An International Journal (April 2009): 159-181. Students count the chocolate chips in cookies to learn about sampling methodology and the potential pitfalls in the use of sampling.
“Bean Counting: A Practical Teaching Approach to Audit Sampling,” David Davis, Accounting Education: An International Journal (1997): 247-253. Students learn sampling concepts by selecting multi-colored jelly beans from jars.
“Using Computerized Audit Software to Learn Statistical Sampling: An Instructional Resource,” Robert Richardson & Timothy Louwers, Issues in Accounting Education (August 2010): 553-567. Students use generalized audit software to determine a variety of audit sample sizes.
“Sampling Practices of Auditors in Public Accounting, Industry, and Government,” Thomas Hall, James Hunton & Bethane Jo Pierce, Accounting Horizons (June 2002): 125-136. A survey of practicing auditors found that most audit sampling applications rely on nonstatistical methods for sample planning, selection, and evaluation.
“The Use of Selection Biases Associated With Nonstatistical Sampling in Auditing,” Thomas Hall, James Hunton & Bethane Jo Pierce, Behavioral Research in Accounting(2000): 231-255. An experiment using accounting students found that haphazard selection leads to biased samples.
“An Empirical Investigation of the Auditor’s Decision to Project Errors,” Randy Elder & Robert Allen, Auditing: A Journal of Practice & Theory (Fall 1998): 71-87. A review of 64 audits performed by three public accounting firms found that 33% of errors discovered in samples were not projected to the population and auditors did not explicitly consider sampling risk in evaluating sample results.