Scribd
Upload
55 views14 pages

Audit Sampling For Microfinance Organizations Instructions

Uploaded by

Chinh Lê Đình
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
55 views14 pages

Audit Sampling For Microfinance Organizations Instructions

Uploaded by

Chinh Lê Đình
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
You are on page 1/ 14

Audit Sampling for Microfinance Organizations

by Mark Schreiner, 2001, mark@microfinance.com

Instructions
Save this spreadsheet with a new name. Keep the original, because this copy will be changed

This spreadsheet determines required sample size for sequential "needle-in-a-haystack" aud
It does not manage the sampling and tracking of results from sampled items;
that is assumed to occur in the accompanying spreadsheet.
Enter the upper bound on the acceptable estimated proportion of "cases".
Valid entries are 0.10, 0.05, 0.025, 0.01, 0.005, and 0.001.
A "case" is an "unusual" or "erroneous" finding.
For example, if auditing for undisclosed rescheduled loans,
an undisclosed rescheduled loan is a "case" or "error".
The upper bound on the acceptable estimated proportion of "cases" is the maximum
share of the portfolio that could be "cases" and still not flag special action in the audit.
For example, 0.01 means that, from an audit perspective, everything is fine as long as
the estimate of the proportion of "errors" or "cases" is less than 1 percent.
Smaller upper bounds increase the required sample size, all else constant.
Enter the desired level of confidence on the upper bound.
Valid entries are 90, 95, 97.5, 99, 99.5, and 99.9.
The level of confidence are in units of percentages.
For example, a 95-percent confidence level with a 0.05 upper bound implies that the
auditor desires to know whether or not the proportion of "cases" or "errors" in the
portfolio is less than 0.05 with at least 95-percent confidence.
Higher desired levels of confidence increase the required sample size, all else constant.

Given the acceptable upper bound and the desired level of confidence, proceed as follows:
1. Draw 30 items.
As always, the items are sampled in descending order, according to their sampling weight
If none of these first 30 items are cases or errors, then stop:
The estimated proportion is less than the upper bound with the desired confidence.
If 6 or more of these first 30 are cases or errores, then stop:
The estimated proportion is not less than the upper bound with the desired confidence.
If, however, 1 to 5 of these first 30 items are cases, then proceed to Step 2.
Or conclude that the estimated proportion is not less than the upper bound and stop.

2. Draw 18 additional items.


As always, the items are sampled in descending order, according to their sampling weight
If 1 or fewer of these first 48 items are cases or errors, then stop:
The estimated proportion is less than the upper bound with the desired confidence.
If 6 or more of these first 48 are cases or errores, then stop:
The estimated proportion is not less than the upper bound with the desired confidence.
If, however, 2 to 5 of these first 48 items are cases, then proceed to Step 3.
Or conclude that the estimated proportion is not less than the upper bound and stop.

3. Draw 15 additional items.


As always, the items are sampled in descending order, according to their sampling weight
If 2 or fewer of these first 63 items are cases or errors, then stop:
The estimated proportion is less than the upper bound with the desired confidence.
If 6 or more of these first 63 are cases or errores, then stop:
The estimated proportion is not less than the upper bound with the desired confidence.
If, however, 3 to 5 of these first 63 items are cases, then proceed to Step 4.
Or conclude that the estimated proportion is not less than the upper bound and stop.

4. Draw 15 additional items.


As always, the items are sampled in descending order, according to their sampling weight
If 3 or fewer of these first 78 items are cases or errors, then stop:
The estimated proportion is less than the upper bound with the desired confidence.
If 6 or more of these first 78 are cases or errores, then stop:
The estimated proportion is not less than the upper bound with the desired confidence.
If, however, 4 to 5 of these first 78 items are cases, then proceed to Step 5.
Or conclude that the estimated proportion is not less than the upper bound and stop.

5. Draw 14 additional items.


As always, the items are sampled in descending order, according to their sampling weight
If 4 or fewer of these first 92 items are cases or errors, then stop:
The estimated proportion is less than the upper bound with the desired confidence.
If 6 or more of these first 92 are cases or errores, then stop:
The estimated proportion is not less than the upper bound with the desired confidence.
If, however, 5 of these first 92 items are cases, then proceed to Step 6.
Or conclude that the estimated proportion is not less than the upper bound and stop.

6. Draw 14 additional items.


As always, the items are sampled in descending order, according to their sampling weight

If 5 or fewer of these first 106 items are cases or errors, then stop:
The estimated proportion is less than the upper bound with the desired confidence.
If 6 or more of these first 106 are cases or errores, then stop:
The estimated proportion is not less than the upper bound with the desired confidence.
Give up at this point; do not review more items.

In some cases, the auditor will draw a sample of a certain size, with the sample size determin
by considerations that are unrelated with the desire to sample for "needle-in-the-haystack
In these cases, this spreadsheet can compute the confidence level for the estimated proport
of the portfolio that is a "case" or "error".
In other words, rather than determined a required sample size and then sampling, one may h
sample of a given size (and have found a given number of errors) and wish to know with w
confidence it can be said that the etsimated proportion is less than a given upper bound.
To use this alternative technique, enter the number of items sampled:
Enter the number of "cases" or "errors" found:

Below are displayed the confidence levels that the proportion of the portfolio that is a "case"
"error" is less than the given upper bound:
Upper bound
0.2000
0.1900
0.1800
0.1700
0.1600
0.1500
0.1400
0.1300
0.1200
0.1100
0.1000
0.0900
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300

0.0200
0.0100
0.0090
0.0080
0.0070
0.0060
0.0050
0.0040
0.0030
0.0020
0.0010
0.0009
0.0008
0.0007
0.0006
0.0005
0.0004
0.0003
0.0002
0.0001

Entries
changed.

ck" audits.

0.1

95

Total sample size


30
g weights.

48

g weights.

63

g weights.

78

g weights.

92

g weights.

g weights.

106

determined
haystack" issues.
proportion

ne may have a
w with what

106
5

a "case" or an
Confidence
100.0
100.0
100.0
100.0
99.9
99.9
99.7
99.4
98.7
97.5
95.2
91.3
84.9
75.0
61.0
43.7
25.3
10.3

2.1
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

2001 Mark Schreiner

Upper bound: 0.10


Errors
0
1
2
3
4
5

Level of confidence
90
95
24
30
39
48
54
63
67
78
80
92
93
106

97.5
37
56
73
88
103
117

99
47
67
85
101
117
132

99.5
53
75
93
110
126
142

99.9
70
93
113
131
148
165

97.5
74
112
145
176
205
234

99
93
133
169
201
233
263

99.5
106
149
186
220
252
283

99.9
139
185
225
262
296
330

97.5
148
223
289
351
410
467

99
185
266
337
402
465
525

99.5
212
298
371
440
543
566

99.9
277
370
450
523
592
659

97.5
369
558

99
461
664

99.5
530
744

99.9
691
924

Upper bound: 0.05


Errors
0
1
2
3
4
5

Level of confidence
90
95
47
60
78
95
107
126
134
156
160
184
186
211

Upper bound: 0.025


Errors
0
1
2
3
4
5

Level of confidence
90
95
93
120
156
190
213
252
268
311
320
367
371
421

Upper bound: 0.01


Errors

Level of confidence
90
95
0
231
300
1
389
475

2
3
4
5

533
669
800
928

630
776
916
1052

723
877
1025
1167

841
1005
1161
1311

928
1098
1260
1415

1123
1307
1480
1646

Level of confidence
90
95
461
600
778
949
1065
1260
1337
1551
1599
1831
1855
2103

97.5
738
1115
1445
1756
2049
2334

99
922
1328
1682
2010
2321
2622

99.5
1060
1487
1855
2196
2519
2830

99.9
1382
1847
2246
2613
2959
3291

Level of confidence
90
95
2302
2996
3890
4744
5323
6296
6681
7754
7994
9154
9275
10514

97.5
3689
5572
7225
8768
10242
11669

99
4606
6639
8406
10046
11605
13063

99.5
5299
7431
9274
10978
12595
14150

99.9
6908
9234
11229
13063
14795
16455

Selected upper bound:


Selected level of confidence:

0.1
95
0
1

1
1

2
1

3
1

4
1

30
60
120
300
600
2996

48
95
190
475
949
4744

63
126
252
630
1260
6296

78
156
311
776
1551
7754

92
184
367
916
1831
9154

Upper bound: 0.005


Errors
0
1
2
3
4
5

Upper bound: 0.001


Errors
0
1
2
3
4
5

Index to # of errors:
Index to confidence:
N for upper bound
n for upper bound=
n for upper bound=
n for upper bound=
n for upper bound=
n for upper bound=

0.1
0.05
0.025
0.01
0.005
0.001

Required N:

30

48

63

78

92

5
1
106
211
421
1052
2103
10514

106

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy