Question

What factors should be considered when determing the sampling method (e.g., random, monetary unit sample)?

AICPA Audit Guide Audit Sampling

AICPA AU -C Section 530, Audit Sampling

Answer 1

Sampling is a statistical process whereby Auditors choose the type of the sample.

Factors to be considered when determing the sampling method might include:

1. Nature, scope and object of enquiry: This constitutes the most important factor affecting the choice of a particular method. The method selected should be such that it suits the type of enquiry that is to be conducted by the researcher. This factor is also important in deciding whether the data already available (secondary data) are to be used or the data not yet available (primary data) are to be collected.
2. Availability of funds: Availability of funds for the research project determines to a large extent the method to be used for the collection of data. When funds at the disposal of the researcher are very limited, he will have to select a comparatively cheaper method which may not be as efficient and effective as some other costly method. Finance, in fact, is a big constraint in practice and the researcher has to act within this limitation.
3. Time factor: Availability of time has also to be taken into account in deciding a particular method of data collection. Some methods take relatively more time, whereas with others the data can be collected in a comparatively shorter duration. The time at the disposal of the researcher, thus, affects the selection of the method by which the data are to be collected.
4. Precision required: Precision required is yet another important factor to be considered at the time of selecting the method of collection of data.

But one must always remember that each method of data collection has its uses and none is superior in all situations