Audit sample size calculator
How many items to test by monetary unit sampling, and the interval to pick them at, under SA 530.
Free, with no sign-up Worked out in your browser The working shown, line by line
The answer
| The population | |
| Population value | 1,00,00,000.00 |
| Tolerable misstatement | 5,00,000.00 |
| Expected misstatement | 50,000.00 |
| The factors | |
| Confidence level | 95 per cent |
| Reliability factor For no errors at this confidence | 3 |
| Expansion factor Allows for sampling error in what is expected | 1.6 |
| The sample | |
| Expected misstatement × expansion factor | 80,000.00 |
| Tolerable misstatement less that | 4,20,000.00 |
| Population × reliability factor ÷ that | 71.43 |
| Sample size Rounded up to a whole item | 72 |
| Sampling interval Population value ÷ sample size | 1,38,888.89 |
- Monetary unit sampling gives every rupee in the population the same chance of being picked, so the larger items are the likelier ones.
- Any item at or above the sampling interval is certain to be picked, and is usually tested in full and taken out of the population first.
SA 530, Audit Sampling.
How it is worked out
Monetary unit sampling treats every rupee in the population as an item that could be picked, so the larger balances are the likelier ones to be tested - which is usually what an auditor wants.
The sample size is the population value times the reliability factor for the confidence chosen, divided by the tolerable misstatement less the expected misstatement grossed up by the expansion factor.
The sampling interval is the population value divided by the sample size. Items are picked every interval through the cumulative book values, from a random start.
Worked example: A ₹1 crore population, ₹5 lakh tolerable, ₹50,000 expected, at 95%
The expected misstatement grossed up is ₹80,000, leaving ₹4.2 lakh of room, so 72 items are tested at an interval of about ₹1.39 lakh.
Questions
What is monetary unit sampling?
A statistical sampling method in which each rupee of the population is a sampling unit. It picks the larger items more often, and is widely used for testing balances and classes of transactions for overstatement.
Where do the reliability factors come from?
They are the Poisson factors for finding no misstatements at the confidence level chosen: 2.31 at 90%, 3.00 at 95% and 4.61 at 99%. The expansion factors allow for sampling error in the misstatement expected.
What happens to items above the interval?
Any item at or above the sampling interval is certain to be selected. It is usually tested in full as an individually significant item and taken out of the population before the rest is sampled.
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