STATISTICAL SAMPLING FORMULAS

Mean-Per-Unit
ETAV = (Mean of audited values) * N
Projected misstatement = (Estimated total audited value) - (Book value of population)

Planned ASR =

Tolerable misstatement
1 + (Incorrect acceptance coefficien t / Incorrect rejection coefficient)

Population size * Incorrect rejection coefficien t * Estimated standard deviation

Planned allowance for sampling risk

Sample size =

N * Incorrect accept . coef * Sample std . dev .

Adjusted ASR = Tolerable Misstatement -

Sample size

ETAV = Estimated Total Audited Value

ASR
= Allowance for sampling risk
N
= Number of items in the population
Ratio Estimation
Projected Misstatement = (Sample Net Misstatement / Book Value of Sample) * Population Book Value
OR
Projected Misstatement = (Average Misstatement in sample / Average book value in Sample) * Population book value
ETAV = Population Book Value Projected Overstatement (or + projected understatement)
Difference Estimation
Projected Misstatement = Average Difference * Number of Accounts
ETAV = Population Book Value Projected Overstatement (or + projected understatement)
Probability-Proportional-to-Size

Sample size =

Recorded amount of population * Reliability factor

Tolerable misstatement - (Expected misstatement * Expansion factor)

Sampling interval = Book value of receivables / Sample size

Basic precision = Reliability factor * Sampling interval
Reliability Factors For Misstatements
Number of Overstatements
1%
5%
10%
0
4.61 3.00
2.31
1
6.64 4.75
3.89
2.
8.41 6.30
5.33
3.
10.05 7.76
6.69
________________________________________________________
Expansion Factors
1.9
1.6
1.5