Statistical Sampling for Tests of Controls, Compliance and Fraud – Complete Course

This course contains the following individual modules.

Section A: The Audit Risk Model (a.k.a., The Rosetta Stone) and WIIFM (What’s in it for me)

The Section A blurb is: This model (50 years young!) quantifies the audit process. Remember it?? It encourages efficiency and effectiveness… plan more, and audit way, way less! You will find the different costs of evidence and their impact on your audit efficiency staggering!

Estimated time to complete: 45-60 mins (interactive with quizzes).

Section B: Statistics (not "Sadistics") … A Primer, and Tying Sample Size to Audit Risk

Yes, we need to revisit some time-honoured concepts (variance, alpha error, beta error, precision). Relax! We’ll make it easy by explaining it in plain English! The pay-off for getting this planning right is smaller sample sizes!

Estimated time to complete: 75-90 mins (interactive with quizzes).

Section C: Multiple Statistical Sampling Methods

Learn that four methods for selecting samples for controls testing are available! Get acquainted with our decision tree for selecting the best sampling method for your audit objective. Find out how to download the freeware we will be using (EZ-Quant).

Estimated time to complete: 20-30 mins (interactive with quizzes).

Section D: The "Fixed" Statistical Sampling Method for Test of Controls

This module familiarises you with the most commonly taught attribute sampling method. Let’s re-familiarise ourselves with the ‘fixed’ sampling method. Pre-requisite knowledge required: It is assumed you have completed Sections B and C before commencing Section D.

Estimated time to complete: 60-75 mins (interactive with quizzes).

Section E: The "Two Step" Statistical Sampling Method for Tests of Controls

Suitable for Internal Auditors and External Auditors doing tests of controls, this is the most efficient statistical sampling method in the world. Also known as ‘Stop and Go Sampling’ this method is an auditor’s dream, producing small sample sizes. This highly desirable method is rarely seen in auditing literature.

Estimated time to complete: 60-75 mins (interactive with quizzes).

Pre-requisite knowledge: It is assumed you are familiar with the concepts of Sections B and C before commencing this section.

Section F: The "Discovery" Statistical Sampling Method for Tests of Controls and Fraud

This is your ‘go to’ method if you need to test for fraud and make a powerful statements like, “I’m 99% confident that no fraud has occurred”. Get the right audit tool for the job.

Estimated time to complete:  40-55 mins (interactive with quizzes).

Pre-requisite knowledge: It is assumed you are familiar with the concepts of Sections B and C before commencing this section.

Section G: A Very Necessary Discussion on Selecting Your Sample (a.k.a. Pulling or Drawing the Sample)

After choosing the right sampling method, don’t undermine it by BIASING your selection process! It’s the easiest way for someone to attack your sample. Discover the pros and cons of the 5 recognised selection techniques. Learn how to pull your sample without bias, address sample representativeness, and use EZ-Quant as a random number generator.

Estimated time to complete: 60-75 mins (interactive with quizzes).

Pre-requisite knowledge: It is assumed you have downloaded the “EZ-Quant” freeware before commencing this section.

Section H: Estimation Sampling

This attribute sampling method is relevant for first-time audits or consulting work where you don’t know the expected error or tolerable error for the population, but you need to find out. Learn how to estimate the error rate and let the data talk to you via this method.

Estimated time to complete: 30-45 mins (interactive with quizzes).

Pre-requisite knowledge: It is assumed you are familiar with the concepts of Sections B and C before commencing this section

This course was developed in the USA, however it does include reference to equivalent International Audit Standards (ISA’s) that have been adopted by other countries.