When using statistical sampling to evaluate results using per-unit-sampling, may one conclude at the tested risk...

When using statistical sampling to evaluate results using per-unit-sampling, may one conclude at the tested risk levels than an account is not materially misstated whenever the projected misstatement is less than the tolerable misstatement?

Expert Solution

Statistical sampling is nothing but checking of few items when large amount of data is available to check.

Statistical sampling involved using of statistics and sampling being done to arrive at conclusion whether material misstatement is their or not.

If the data chosen is not materially misstated then we conclude that whole data is correct.

If data contains misstatement then whole of data is materially misstated.

All the above deductions are based on samples chosen.

Also while doing such sampling another thing to be kept in mind is that a tolerable amount of misstatement is predecided which acts as a basis of arriving at a conclusion.

It is difficult to track down every member of the population, so sampling is done which may be random or systematic or statistical.

If the misstatement of samples is less than tolerable one than we conclude that it is within limits and samples are OK.

However if it exceeds the tolerable limit then we conclude that misstatement is material.

It is based on samples and hence choosing of samples is utmost important.

Also, tolerable limit for one person may differ depending upon limits of each person.

So statistical sampling is almost based on samples.

But the statement above mentioned is correct.

ekkarill92 answered 1 year ago

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