Audit sampling is an application of audit procedure to less than hundred percent items within an

account balance or class of transections. The auditor uses audit sampling in both compliance and
substantive testing because every item comprising an account balance or class of transaction
would be costly. The theory of audit sampling assumes that the quality of or amount of a
properly selected sample is indicative of the quality or amount of population from which the
sample is selected. An auditor may not be in a position to check cent per cent items recorded in
books of accounts. He can opt for audit sampling due to time limit. The auditor uses either
stastical sampling techniques or non-statistical sampling techniques. Statistical sampling
techniques use the law of probability to make objective statement about a population. The auditor
must select the sample statistically. The sample result must be mathematically evaluated. The
auditor uses probabilistic selection techniques to select a statistical sample. Under probabilistic
selection techniques,. Every item in the population has a known chance of being selected. Non
statistical sampling techniques usually do not use these probabilistic selection techniques.
AUDIT SAMPLING METHODS
A-NON-STATISTICAL SAMPLING METHOD
1.Judgement sampling (Test checking): The judgement sampling requires the selection of data
on the basis of auditors experience. The experience and judgement is involved in checking the
selected data. The auditor opinion effects the dicision for the selection of sample.
B.STATISTICAL SAMPLING METHODS
2.Random sampling. All items are given numbers. Every item has aqual chance of selection in a
sample. The calculators, computer or table can be used to select the numbers to be included in
the sample.
3.systematic sampling. The systematic method can pick first item at random and thereafter
items are included under serial numbers. Sample selected may not be representative of the
population.
4.Haphazard sampling. It is an alternate to random selection when an auditor tries to draw
sample from the entire population. The auditor personal opinion should not influence in the
selection of sample.
5.Startified sampling. The stratified sampling requires the data to be divided into subpopulation. One part of data may be tested on cent percent basis and the other part may be tested
by samplel.
6.Cluster sampling. The sampling is possible when data is kept in-groups. A cluster is selected
at random and then all items in a cluster are examined. One expense may be recorded weekly
while other is kept in month.
7.Block sampling. The block sampling method requires the selection of one block at random.
The invoices relate to one month, for example November, are selected for sample. It is not the
representative of whole data.
TEST CHECKING

An auditor may not be in position to check cent percent items while auditing the accounts of any
concern. He can examine some entries and remaining items may be considered checked. The
data is very large and sufficient time is not available for checking. The cost of audit may be high
as compared to fee. The interested parties cannot wait for long time for audited accounts. The
audit staff may feel burden due to large data and errors may not be disclosed. The true and fair
view does not mean cent percent accuracy. In these cases there is need of test checking or
judgement sampling.
DEFINITION
Professor MEIGS says that test checking means to select or examine a representative sample
from large number of similer items. It is clear that test checking is sample checking. The whole
data cannot be examined. The audit staff can use statistical techniques to check the fact and
figures. A certain percentage of transaction can be selected for through examination. The
remaining transection are supposed checked.
ESSENTIAL OF TEST CHECKING
1. Sample: The sample items selected from whole data must be representative. The selection can
be made by any method. The entire data must be presented in the form of sample.
2. Last Month: The last month of accounting year is the most important. The items appearing
in the last month must be given maximum importance at the time of selecting the sample.
3. First Month: The first month of accounting is provides essential information. The
transaction recorded in the first month must be assigned high weightage in order to select the
sample.
4. Surprise testing: The auditor must include the element of surprise in the selection of test. The
accounting staff must be unaware of test checking so that he should not make arrangement for
test checking.
5. Checking Method: The auditor can change his method of selecting the sample. At one time
he can use one method while at another time he can use alternate method. The selection method
must be changed from time to time.
6. Every Type of Transaction: The auditor must select every type of transaction in test
checking. There is need to include each type of dealing in the sample.
7. Every employee: The auditor can check the work of every employee. The test checking can
be used to examine the work of all employees in the organization.
8. Throughout the year: The test checking can be applied to all items appearing in the books
throughout the year. The recurring the items are most suitable for testing checking.