[whatamidoing]

Can someone confirm (or correct) my understanding of evaluating the results of variables sampling?

So, when you’re analyzing the results of your variables testing results, you choose between mean per unit, ratio, or difference estimation by using the formula to arrive at a point estimate. The point estimate is then added to the allowance for sampling risk to arrive at the acceptable range. You then compare the client’s book value to the auditor’s range that you just calculated, right?

Thank you!

F - 85 (11/2012)
R - 87 (1/2013)
A - 92 (2/2013)
B - 90 (4/2013)

DONE!

[Anonymous]

That coincides with my understanding. I think you got it! To take it a step further, if the clients book value falls within the acceptable range +/- the allowance for sampling risk then the book value is fairly stated. Be careful not to make assumptions about the allowance for sampling risk. If it is not given then there is not enough information to determine if the book value is fairly stated.

[whatamidoing]

Excellent, thank you! Good reminder on making assumptions for allowance for sampling risk. I made that mistake in a few Becker questions the first go 'round.

F - 85 (11/2012)
R - 87 (1/2013)
A - 92 (2/2013)
B - 90 (4/2013)

DONE!

[Author]

Replies