What is Audit Sampling? 

  • Audit sampling is the method the Auditor is required to use in choosing the volume of transactions to review to come to their Audit Report conclusions.
  • The sampling approach taken is necessary because a large entity will have thousands of transactions over a year – some in different companies and legal jurisdictions.
  • It would be beyond any Audit’s capability to review a significant number of these transactions. Instead, the Auditor must use a given mathematical approach to come to several deals to sample tests. Auditors use algorithms too!

How does the Sampling work?

 It’s beyond the scope of writing a blog to explain the underlying calculations. No ordinary member of the public would ever be asked to assess whether an appropriate number of transactions audited. However, if post Audit concerns are raised about the client’s accounts, an investigation can be opened into how the Audit conducted, and the review team would look like this and other aspects of the Audit.

Objectives and Practicalities

The larger the number of transactions in an Audited entity, the more sampling must be taken by the Auditor. Sampling often involves ‘two-directional testing being carried out.

This requires the Auditor both to choose source records – in times gone by; these would be paper invoices, orders, credit notes, etc., now more likely to be electronic records – and test that such initial transaction initiating document was processed correctly through the books and records of the company right through to the Balance Sheet/P&L Account.

Here the Auditor will be looking to see if the correct amounts on the source document captured correctly – did the number of goods bought go into the client’s stock/did the right amount owing get put into the correct supplier creditor account/did an appropriate amount of VAT get captured and added to the VAT account etc. Two-way testing also involves reviewing Accounting transactions backward – to see if the correct source documents can be located to back up the postings that took place.


The calculations behind sampling are not that complex. The sample size is broadly in line with the previous year’s Audits can also provide a valuable guide to the Auditor. What is perhaps more impactful on the quality of the Audit performed is the rigor and diligence applied to the testing by the Auditor.

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