What is 'audit sampling'?

Audit sampling is the process of selecting and evaluating a subset of transactions or records from a larger population to draw conclusions about that population. This approach is crucial in internal auditing because it allows auditors to obtain sufficient evidence while managing time and resource constraints. By analyzing a representative sample, auditors can make inferences about the entire set of transactions, helping to identify any anomalies or areas of concern without the need to examine every single record.

The effectiveness of audit sampling lies in its ability to provide insights into patterns and controls within the larger dataset, and it can be conducted through various methods such as random sampling, systematic sampling, or judgmental sampling, depending on the audit objectives and the nature of the population being tested. This method ensures a balance between thoroughness and efficiency, making it an essential tool in the auditing profession.