Advanced Topics
In a nutshell: Auditors use sampling and analytics to test financial data efficiently.
## Why Sampling?
Auditors rarely check every transaction. Instead, they use sampling to draw conclusions about a population.
## Sampling Methods
- **Statistical Sampling:** Uses math to select items and measure risk.
- **Nonstatistical Sampling:** Based on auditor's judgment.
## Analytical Procedures
These involve comparing financial data to expectations:
- Trend analysis
- Ratio analysis
- Reasonableness tests
## Application
Sampling and analytics help auditors focus efforts, identify anomalies, and gather evidence efficiently.
Examples
- A CPA selects a random sample of payroll records for testing.
- An auditor notices a spike in expenses using trend analysis and investigates further.