Audit Sampling Research: A Synthesis and Implications for Future Research

Abstract

SUMMARY While research has influenced auditing standards for audit sampling, academic research provides limited insights into the current use of audit sampling. We synthesize relevant research based on a sampling decision framework and suggest areas for additional research. Important judgments include determining if sampling applies, what type of sampling to apply (e.g., attribute or monetary sampling), whether to use statistical or nonstatistical techniques, appropriate inputs to determine sample size, and evaluation of results, particularly when errors are observed in the sample. Several of these judgments may be influenced by environmental factors, such as regulation, litigation, competition, culture, and technology, and there are a number of research opportunities available in exploring how these environmental factors influence audit sampling decisions. Research indicates that auditors may underestimate risks and required assurance in order to reduce the extent of testing, although some of this research predates current risk assessment standards, as well as recent regulatory changes. Research also indicates auditors sometimes fail to project sample errors, and are prone to decision biases when evaluating nonstatistical samples. More recent research finds low rates of sample errors in many sampled populations, indicating that some sampling concerns may be mitigated in the post-Sarbanes-Oxley (SOX) environment. Data Availability: Please contact the authors.