Statistical sampling in Audit for the NSO

Stratification
&
Cluster Sampling
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 Statistical sampling in Audit for the NSO

Stratified Random Sampling

 Population is partitioned into smaller sub-
population ,called strata.
 These strata should be mutually exclusive and
collectively exhaustive & homogeneous according
to some characteristics.
 Then a sample of ni = n(Ni/N) will be chosen at
random from ith strata. I = 1,2,3,….k,Where k is
the no. of strata.(Proportional allocation)
 This is used to increase precision without
increasing cost.
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 Statistical sampling in Audit for the NSO

Optimum allocation in strata

( N i . SDi ) ( N i . SDi )
ni 
( N .SE x / Z r )   N i . SDi
2 2


x

Where, SDi = Standard Deviation of the ith

stratum.
Ni = No. of items /transactions in ith
stratum .
SEx = Acceptable margin of error for mean.
Zr = Standard Normal value for the desired
confidence level.
ni = optimum sample size of ith strata.
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Statistical sampling in Audit for the NSO

Cluster Sampling
 It is used whenever the population is
homogeneous but can be partitioned & for
practical convenience
 The target population is first divided into
mutually exclusive and collectively
exhaustive subpopulations.
 Then a random sample of cluster is selected
by SRS.Each selected cluster is either all the
units are included or a sample of elements is
drawn probabilistically.
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Statistical sampling in Audit for the NSO

Stratified Vs. Cluster Sampling

 In cluster sampling only a  In stratified sampling all

cluster is chosen the strata are chosen for
 Elements within a cluster further sampling.
should be as  Elements within a strata
heterogeneous as possible should be as
 It is operationally homogeneous as possible.
convenient and possible  It increase the precision
reduction of costs of the estimates without
increasing costs

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Statistical sampling in Audit for the NSO

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