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Sampling and Auditing


Auditing is a process where an auditor selects some random transactions that are known as samples, and assesses the authenticity of the overall transactions. The process of Sampling helps an auditor to provide conclusions regarding the transactions or the balances without spending a lot of time and cost to examine each and every transaction. There are two type of sampling that is usually undertaken by an auditor to assess the quality of the transactions. The first is the Statistical Sampling, and the other is the Non-Statistical Sampling. This paper will highlight the advantages and the disadvantages of both the approaches.

Advantages and Disadvantages of Statistical Sampling and Non-Statistical Sampling

Statistical Sampling

The statistical sampling needs the auditors to make their judgments explicit on different matters like the rate of the expected error, level of confidence, and the rate for tolerable error. This helps to ensure that the auditors are using a methodological approach in order to sample their work. The size of the sample is calculated on the basis of the statistical principles that justify the sample. The statistical sampling facilitates the identification of the risk of sampling and evaluates the results in a better, precise, and quantified manner (Gray & Manson, 2007).

Despite having these advantages, the statistical sampling also has a number of disadvantages. The first and the foremost disadvantage of the statistical sampling is that it is time consuming, that makes it in turn more expensive than the non statistical sampling.

The statistical sampling needs different documents like invoices, statements of banks, etc. to be arranges in a manner that makes each of them identifiable for selection purposes. Obviously, it is an easier way to computerize the records of the clients. It is usually argued that it is difficult to understand statistical sampling. However, the audit firms use different types of packages for statistical sampling that determines the size of the sample and conducts the evaluation of results as well. Thus, the auditing staff is not required to develop an understanding of the mathematical theory that underlies the method of statistical sampling.

It is also to be noted that from past two decades, the use of statistical sampling has been deteriorated. Currently it is used only in the specialized situations of auditing like the audits of insurance companies and financial institutions.

Non-Statistical Sampling

The Non-Statistical Sampling also known as judgment sampling requires an auditor to choose a random sample without considering any types of the parameters of a statistical sample. This type of decision can be considered as a customized decision that is based on the goals of the procedure.

This type of sampling is cost effective and as efficient as the statistical sampling approach. It is less time consuming and the objectives of the audit are fully met by using the non-statistical approach. Moreover, unlike statistical sampling, this process can also be used and is feasible while sampling a relatively small population (Kan, 2013).

In non-statistical sampling process, the auditor is unable to quantify the risk of sampling. Instead, of this, an auditor selects those sample items which he believes that it will derive the most important and useful information for the auditing process. Any type of sampling procedure that does not assess the associated risk is known as a non-statistical procedure for sampling.

The major disadvantage of using this approach is that here, the auditor undertakes a professional judgment instead of using statistical methods to create a random sample. He doesn’t have any evidence for choosing a specific sample. Everything depends on his fine sense of judgment and expertise. This type of sampling method is often considered subjective hence, is not recommended to use while drawing formal conclusions.


After reviewing the advantages and the disadvantages of the statistical and non-statistical sampling, it would not be wrong to say that both of the processes or approaches are feasible to be used in different situations. Both have different advantages and disadvantages over each other. If it is to be advised to an auditor firm that what type of sampling procedure should be used to conduct an audit, it is important to choose the method according to the situation and the objectives of the auditing. The Statistical sampling must be used in those areas, where the data for auditing or the number of transactions is very high, the auditor needs concrete evidences to choose the data and draw conclusions, and most importantly in the areas where formal reporting is required. On the other hand, an auditor firm while assessing the data that has comparatively lower transactions can use the non-statistical form of sampling. This form of sampling is popular for small firms and the firms that have lower budgets.


Gray, I., & Manson, S. (2007). The Audit Process: Principles, Practice and Cases. Cengage Learning.

Kan, D. E. (2013). Audit and Assurance – Principles and Practices in Singapore (3rd Edition). CCH Asia Pte Ltd.



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