Audit sampling for tests of details of balances is a technique that auditors use to measure monetary misstatements. It involves selecting less than 100% of the items in a population for audit, and then applying audit procedures to the sample. The results from the sample are then used to estimate the population, and the auditor can use this information to issue opinions.  Auditors use audit sampling to: - Reduce the risk of assessed control - Determine if the exception rate in the population is low enough - Confirm that the control is working effectively for auditing internal control over... Show more

Audit sampling for tests of details of balances is a technique that auditors use to measure monetary misstatements. It involves selecting less than 100% of the items in a population for audit, and then applying audit procedures to the sample. The results from the sample are then used to estimate the population, and the auditor can use this information to issue opinions. 

Auditors use audit sampling to:
- Reduce the risk of assessed control
- Determine if the exception rate in the population is low enough
- Confirm that the control is working effectively for auditing internal control over financial reporting 

Audit sampling is necessary when the population is large, because examining the entire population would be inefficient. The sample should have the same characteristics as the complete data it represents, and should be representative of the population and free from bias. When determining sample size, auditors use tolerable misstatement. 

Here are some examples of audit sampling:
Random selection: Using a random number generator to identify transactions to test
Probability proportional to size (PPS) sampling: Selecting items from the population based on their size
Targeted audit sampling: Testing specific account balances or customer balances 

Show less