Variables sampling definition
/What is Variables Sampling?
Variables sampling is the process used to predict the value of a specific variable within a population. For example, a limited sample size can be used to compute the average accounts receivable balance, as well as a statistical derivation of the plus or minus range of the total receivables value that is under review. By using variables sampling, someone involved in auditing the books of a business or who is examining its product quality can make inferences about the population from which a testing sample was drawn.
Example of Variables Sampling
As an example of variables sampling, a company wants to audit its financial records for potential errors in invoice processing. The population consists of 10,000 invoices for the fiscal year. The variables of interest are invoice amount, date, and vendor ID. The sampling steps are as follows:
Define the sampling criteria:
Focus on invoices where the amount exceeds $10,000.
Randomly select invoices from three major vendors.
Include invoices from the last quarter of the year.
Sampling Process:
Extract all invoices from the database that meet the criteria (e.g., amount > $10,000, associated with the selected vendors, and dated in the last quarter).
From this subset, use random sampling to select 100 invoices for detailed auditing.
Examine Variables:
For each selected invoice, review the following:
Verify that the amount billed matches the service/goods delivered.
Check the date to ensure compliance with contractual terms.
Validate the vendor ID against approved vendor lists.
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FAQs
How Does Variables Sampling Differ from Attributes Sampling?
Variables sampling differs from attributes sampling in its focus: variables sampling estimates the actual dollar value or amount of a population, while attributes sampling tests whether a control or condition is present. Attributes sampling gives a yes/no outcome (e.g., control performed or not), whereas variables sampling provides a numerical estimate of misstatement. Thus, attributes sampling is generally used for tests of controls, while variables sampling is applied in substantive testing of account balances.