The effectiveness of audit sampling methods recommended to small and medium practices in guides published by audit regulators

Elmarie Swanepoel

South African Journal of Accounting Research, 2018, vol. 32, issue 2-3, 109-131

Abstract: The paper focuses on the quality of audits in small and medium practices (SMPs) when these audits are performed according to the freely available guidelines published by various regulatory bodies. Audit sampling is highlighted as a key component of audit quality in several reports of regulatory bodies’ inspection findings. A sampling methodology frequently used by SMPs is monetary unit sampling (MUS) in combination with either MUS or ratio projection. The effectiveness of this approach is investigated in terms of four criteria defined in the paper. Simulation was used for this purpose. Different scenarios were obtained by varying sample size, number of tainted items in the population and the total error amount. An actual revenue database was used as a point of departure. The study shows that simply following the proposed sampling guideline, can easily lead to sub-optimal use of resources. A more considered approach may alleviate this problem.

Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/10291954.2018.1514140 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rsarxx:v:32:y:2018:i:2-3:p:109-131

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rsar20

DOI: 10.1080/10291954.2018.1514140

Access Statistics for this article

South African Journal of Accounting Research is currently edited by Soon Nel

More articles in South African Journal of Accounting Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().