After identifying the sampling frame, what does the auditor determine next?

After identifying the sampling frame, the auditor determines whether a 100% audit is feasible or if statistical sampling should be used. This step is crucial because it directly impacts the efficiency and effectiveness of the audit process.

A 100% audit involves reviewing every item within the defined sampling frame, which can be time-consuming and resource-intensive. Therefore, if the population is large or if resources are limited, the auditor may opt for statistical sampling. Statistical sampling allows for a subset of the data to be analyzed, providing the auditor with insights that can be extrapolated to the entire sampling frame. This method can yield reliable results without the burden of auditing every single record.

Determining the feasibility of a 100% audit versus sampling is essential for creating a strategic plan for the audit, ensuring that it meets organizational goals while also remaining manageable. This evaluation is crucial in setting the direction for the audit and aids in prioritizing where efforts should be focused.