Discover the optimal sampling method for reviewing an organization’s balance sheet and the program that produced it, as per the ISACA CISA certification exam. Gain comprehensive insights from an expert in this concise and informative response.
Table of Contents
Question
A review of an organization’s balance sheet for material transactions and an application review of the program that produced the balance sheet would use which of the following sampling methods?
A. Variable sampling
B. Judgmental sampling
C. Discovery sampling
D. Stop-or-go sampling
Answer
B. Judgmental sampling
Explanation
The appropriate sampling method for reviewing an organization’s balance sheet and the program that produced it is B. Judgmental sampling.
Judgmental sampling, also known as purposive sampling, involves selecting a sample based on the auditor’s professional judgment and experience. In the context of reviewing an organization’s balance sheet, the auditor would use their expertise to identify and select the most material transactions and the critical application controls within the program that generated the balance sheet.
This approach allows the auditor to focus on the areas of highest risk and significance, ensuring that the review covers the most important aspects of the balance sheet and the associated system. Judgmental sampling is particularly effective when the auditor has a deep understanding of the organization, its operations, and the specific risks involved.
In contrast, the other options are less appropriate:
A. Variable sampling is typically used for statistical sampling, which may not be the most efficient approach for a focused review of material transactions and application controls. C. Discovery sampling is used to identify the existence of errors or irregularities, rather than a comprehensive review of the balance sheet and the underlying system. D. Stop-or-go sampling is a sequential sampling technique used to determine whether to continue or stop the sampling process based on the results obtained, which is not the primary objective in this case.
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