Audit Sampling In An Auditor

The observed difference was created by sampling errors, keeping in mind there is no bias because the survey is done randomly. 2. Null hypothesis also occurs when there is no true difference between the two groups. This meaning that the true difference is the difference a researcher would find if there were no sampling errors. 3.

The Chi-Square is used in two circumstances as below: i) When the researcher want to estimate how closely the observed distribution matches the proportions that is expected. This is called ‘goodness of fit’ test. ii) When the researcher wishes to estimate whether random variables used are independent. Assumptions of the Chi-Square Test: i) To use Chi-Square test for independence, the two variables that are used must be of categorical data i.e. the data ought to be measured at nominal or ordinal levels.

Data collected were analyzed by using three approaches: 1. Cronbach’s alpha (a) was used to test the reliability. Cronbach’s alpha indicates how well the items in a set are positively correlated to one another. This is to make sure that the scales are free of random or unstable errors and produce consistent results over time (Cooper & Schindler, 1998); 2. Descriptive statistics where the researcher used mean, standard deviation and variance to get an idea on how the respondents reacted to the items in the questionnaire.

Kim and Kolen (2010) pointed out that the unsmoothed method is most appropriate in the study in order to avoid to the influence of the smoothed equipercentile equating method (used to remove irregularities) on population invariance. For example, smoothing could produce lower standard errors than the USEE Kolen and Brennan (2004). As a result, unsmoothing equipercentile equating method was used. 3. The equally-weighted root expected square difference (ewREMSD) was used in the study to give equal weight to all score points and to examine the impact of the subgroups on the test takers success or failure designations.

This evidence should not be accepted, because the reliability of the evidence is flawed. The best type of confirmation that the auditor could have received would have been written confirmations from the external parties. Looking at this situation, the auditor should have made a professional judgement call to determine if the evidence received was persuasive enough for him to make an accurate determination on the accuracy of the Accounts Payable. With such a small sample size, the auditor is taking on too much audit risk, and ... ... middle of paper ... ...ment made showing gratitude to the accountants that provided review services for the business since its date of incorporation. e. Since it is the PA firm’s responsibility to conduct audits, it is a public accountant’s objective to adhere to CAS 200 whereby their objectives are to provide reasonable assurance that the financial statements are not misstated, consider the possibility of fraud or error and communicate finding in accordance with the Canadian Auditing Standards.

The risk manager's task is to guarantee that risks are not taken beyond the level at which the firm can absorb the losses of a likely worst outcome. VaR is just a number created to give senior management false certa... ... middle of paper ... ...utcomes can further provide information on expected losses over a given time period. Stress testing is used as a supplement for VaR analysis. “Because VaR does not capture all relevant information about market risk, its best use is as a tool in the hands of a good risk manager.” There is a reason to be skeptical of both its quality as a risk management instrument and its use in decision making. Article 2 “Subjective Value-at-Risk” Value-at-Risk is becoming extremely popular and is being bandied by pundits into measuring other risks such as credit and operational risk, and many believe that all risks of a company should be computed with a single risk measure.

Thus, it may not make much sense to deploy a scorecard system that relies on inaccurate cost data. It's important to evaluate the overall cost accounting system before making the decision to deploy a scorecard system. The benefits achieved will be greater if the costing system is highly accurate. It would be wise to consider deploying both systems simultaneously if resources permit. Based on the findings reported above, we have developed a short questionnaire shown in Table 1 that can be used as an assessment tool.

Some control risk may always exist, it is due to the inherent limitations of internal control. The auditor can assess control risk at a certain level. For example, the auditor can choose the maximum of 100% to estimate control risk. This is because it is determined that there are not related controls or the auditor does not expect the controls will be effective operated. The auditor can also set control risk at the maximum level in the belief that it is more efficient or less costly to conduct extensive substantive procedures of the account balance than to conduct detailed tests of the controls.

Justification for the choice of this approach is dealt with below. 3.2 Quantitative Method According to Lee (1999), qualitative research is well suited for describing, interpreting and explaining. However it is not well suited for examining issues of prevalence, generalizability or calibration. On the other hand, quantitative research can cover the latter issues. The purpose of conducting quantitative research is to be able to generalise from a sample to a population so that inferences can be made about some

However, as a mixed ... ... middle of paper ... ...suggests that the disadvantages of quantitative research often relate to errors in the collection process. The quantitative method of research that will be adopted for this study will be a survey. Utilizing this form of deductive methodology in a positivistic paradigm will allow the statistical data to be interpreted according to the appropriate theory and allow its findings to be concise and appropriate to the research. A stratified sample will be adopted as the whole population of the organisation can be categorized depending on their views of equality in the workplace. All employees of the organisation will be required to complete a short 10 minute survey containing carefully constructed questions; this will be the basis of the qualitative research in that the findings from the survey can be analysed in order to develop more detailed questions in the focus group.