Statistical Sampling in Auditing: A Statistician's Viewpoint

The auditor's final judgement is based on enquiries, tests and previous knowledge. Some of these enquiries and tests are simple checks that the accounting system works according to its specification, others are subjective assessments. An auditor knows a priori that a good accounting system will not be liable to serious errors in the final accounts. But no system is perfect and some items are likely to be in error due to carelessness or some other random occurrence. The auditor's final check is to carry out substantive tests of the details of the actual transactions carried out during the period under examination. It is this final check which appears straightforward.