Discussion Questions: Define variables sampling

Discussion Questions
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Discussion Questions
Response to question 1 and 2
In my career, the procedures for collecting accounting evidence that I have used are as follows: analytical procedures, observation, inspection of records, confirmations, reperformance, recalculations, client tour, and scanning. Reperformance – this entails doing the accounting or internal control procedure of the client to ensure that the business is actually conforming to its own rules. In essence, with the reperformance procedure, a sample of the computations as well as transfers of information are rechecked. Rechecking of computations comprises testing the mathematical accuracy and rechecking of transfers of information entails determining whether information is recorded consistently in the accounting records (Singleton & Singleton, 2010).
Response to question 3
Variables sampling is understood as a sampling situation that deals with variations in some measurement possessed by all members of a given population. Variables sampling is essentially designed to predict the value of a certain variable for a population (Guy & Carmichael, 2009). The variables that are being audited are usually the arithmetic mean or the total population. Variables sampling is used in the audit examination when the auditor estimates the cost of a group on inventory elements. A case in point is the Certified Public Accountant’s estimation of the cost of a group of inventory elements. At first, the accountant will sample a limited number of elements, calculates the cost per-item, and lastly the accountant obtains the minus or plus range of the total inventory value that is under examination (American Institute of Certified Public Accountants, 2014).
Response to question 4
The objective of variables sampling is to provide auditors and accountants with an estimate of a numerical quantity, for instance the balance of an account. It is essentially used by auditors in performing substantive tests. This method is used to predict a certain variable of a population through sampling (Guy & Carmichael, 2009). A variables sampling situation deals with variations in some measurements that each member of the population possesses. For instance, every person has a weight, but individual weights actually differ.
The objective of attribute sampling as used by auditors is to test internal control. The auditor may use this technique to substantiate accounting populations such as sales, payrolls, cash payments, cash receipts, as well as entries posted on the incorrect account. The auditor will select a specific number of records to estimate the number of times that a specific feature would show up within a population. Attribute sampling is essentially the most common statistical application that internal auditors use in testing the efficacy of controls and establish the rate of conformance to specified criteria. With attribute sampling, an item that is being sampled by the auditor either will or will not have certain attributes or qualities (Whittington, 2010).
Response to question 5
Tolerable misstatement is understood as the application of performance materiality to a given procedure of sampling. It is the a...