## SA 530 – Audit Sampling: Introduction & Foundations

### What is Audit Sampling?

Audit sampling is the application of audit procedures to less than 100% of items within a population, structured so that every sampling unit (every item in the population) has an equal chance of being selected.

> Key idea: You don't check every invoice or transaction — you pick a representative slice and draw conclusions about the whole.

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### Objective of Audit Sampling

To provide a reasonable basis to draw conclusions about the population from which the sample is selected.

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### Key Terms

Term	Meaning
Population	The entire set of data from which a sample is selected and about which the auditor wants to draw conclusions. All items must have an equal opportunity of being selected.
Sample Design	The plan considering (a) purpose of audit procedures and (b) characteristics of the population
Sample Size	Must be sufficient enough to reduce sampling risk to an acceptable level
Sampling Units	Individual items that make up the population; the selection used to extrapolate conclusions about the population

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### Applicability

Auditor uses sampling → Apply SA 530 (statistical or non-statistical)
Auditor does not use sampling → Follow other applicable standards

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### Characteristics of Population

For a sample to be valid, the population must have three characteristics:

1. Completeness – All relevant items must be included

2. Appropriateness – The population must be relevant to the audit objective

3. Reliable – The auditor must obtain evidence about the reliability of the population data

> If the population is incomplete or unreliable, the sample drawn from it will be meaningless.

Worked example

### Example 1

Example – Population & Sampling Units:

An auditor is testing trade receivables worth ₹50 crore comprising 800 customer accounts. The population is all 800 accounts. The sampling units are individual accounts. The auditor selects 60 accounts (sample). Conclusions about overstatement/understatement are drawn for all 800 accounts based on findings from those 60.

### Example 2

Example – Completeness of Population:

An auditor wants to test purchases for the year but the client's purchase register is missing entries from April and May. The population is incomplete — sampling from this register would give misleading results. The auditor must first resolve the completeness issue before proceeding.

⚠️ Common exam mistakes

Confusing 'population' with 'sample' — the population is the full dataset; the sample is the subset selected.
Assuming audit sampling is always required — it applies only when the auditor chooses to use sampling; other approaches (e.g., 100% testing for high-value items) are valid alternatives.
Ignoring population reliability — sampling from an unreliable or incomplete population invalidates the conclusion.
Thinking sample size alone determines quality — design, randomness, and population characteristics are equally critical.

Bare-Act text SA 530, Para 5(a) · SA 530 – Audit Sampling (ICAI) · click to expand

Audit sampling involves the application of audit procedures to less than 100% of items within a population of audit relevance such that all sampling units have a chance of selection in order to provide the auditor with a reasonable basis on which to draw conclusions about the entire population.

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SA 530 – Audit Sampling: Introduction, Meaning, Key Terms, and Population

Worked example

⚠️ Common exam mistakes