{"id":894,"date":"2020-01-27T13:46:16","date_gmt":"2020-01-27T13:46:16","guid":{"rendered":"https:\/\/alminawi.com\/?p=894"},"modified":"2025-12-07T18:21:33","modified_gmt":"2025-12-07T18:21:33","slug":"tts-series-e-internal-audit-fieldwork-and-evidence-collection-episode-07-random-sampling","status":"publish","type":"post","link":"https:\/\/e.americanpro.org\/?p=894","title":{"rendered":"T&#038;Ts Series E, Internal Audit, Fieldwork and Evidence Collection, Episode 07A: (Random) Sampling"},"content":{"rendered":"<p data-start=\"101\" data-end=\"688\"><strong data-start=\"101\" data-end=\"137\">1. Introduction to the Technique<\/strong><br data-start=\"137\" data-end=\"140\" \/><strong data-start=\"140\" data-end=\"159\">Random sampling<\/strong> is a statistical tool used by internal auditors to select a subset of transactions or data from a larger population for testing. The goal is to provide reasonable assurance about the entire population by evaluating just a portion of it. This technique is especially helpful when auditing high-volume processes such as payroll, procurement, or expense reimbursements. At <strong data-start=\"530\" data-end=\"543\">ACME Corp<\/strong>, Internal Auditor <strong data-start=\"562\" data-end=\"571\">Auren<\/strong> uses random sampling to assess whether controls are consistently applied without having to review every transaction.<\/p>\n<p data-start=\"690\" data-end=\"813\"><strong data-start=\"690\" data-end=\"745\">2. Suggested Practical Template for Random Sampling<\/strong><br data-start=\"745\" data-end=\"748\" \/>A simple sampling worksheet should include the following columns:<\/p>\n<ul data-start=\"814\" data-end=\"1209\">\n<li data-start=\"814\" data-end=\"885\">\n<p data-start=\"816\" data-end=\"885\"><strong data-start=\"816\" data-end=\"835\">Audit Objective<\/strong> (e.g., Validate expense reimbursements over $100)<\/p>\n<\/li>\n<li data-start=\"886\" data-end=\"943\">\n<p data-start=\"888\" data-end=\"943\"><strong data-start=\"888\" data-end=\"908\">Total Population<\/strong> (e.g., 3,200 transactions from Q1)<\/p>\n<\/li>\n<li data-start=\"944\" data-end=\"1006\">\n<p data-start=\"946\" data-end=\"1006\"><strong data-start=\"946\" data-end=\"961\">Sample Size<\/strong> (e.g., 30 transactions, based on audit risk)<\/p>\n<\/li>\n<li data-start=\"1007\" data-end=\"1068\">\n<p data-start=\"1009\" data-end=\"1068\"><strong data-start=\"1009\" data-end=\"1036\">Sample Selection Method<\/strong> (e.g., Random Number Generator)<\/p>\n<\/li>\n<li data-start=\"1069\" data-end=\"1123\">\n<p data-start=\"1071\" data-end=\"1123\"><strong data-start=\"1071\" data-end=\"1094\">Transaction Details<\/strong> (Date, ID, Amount, Approver)<\/p>\n<\/li>\n<li data-start=\"1124\" data-end=\"1154\">\n<p data-start=\"1126\" data-end=\"1154\"><strong data-start=\"1126\" data-end=\"1142\">Test Results<\/strong> (Pass\/Fail)<\/p>\n<\/li>\n<li data-start=\"1155\" data-end=\"1209\">\n<p data-start=\"1157\" data-end=\"1209\"><strong data-start=\"1157\" data-end=\"1168\">Remarks<\/strong> (Missing receipts, late approvals, etc.)<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"1211\" data-end=\"1346\">Tools like Excel, audit software (e.g., IDEA, ACL), or even free online random number generators can be used to ensure true randomness.<\/p>\n<p data-start=\"1348\" data-end=\"1752\"><strong data-start=\"1348\" data-end=\"1429\">3. Practical Application Example: Auditing Travel Reimbursements at ACME Corp<\/strong><br data-start=\"1429\" data-end=\"1432\" \/><strong data-start=\"1432\" data-end=\"1445\">CEO Liora<\/strong> receives a concern from HR about inconsistencies in travel reimbursements. She asks <strong data-start=\"1530\" data-end=\"1539\">Auren<\/strong> to conduct a focused audit. Auren meets with <strong data-start=\"1585\" data-end=\"1609\">Project Manager Aven<\/strong> and the Finance Team to understand the process. The policy requires receipts for all claims above $100 and supervisor approval before payment.<\/p>\n<p data-start=\"1754\" data-end=\"2035\">Auren defines the population as <strong data-start=\"1786\" data-end=\"1838\">all employee travel claims from January to March<\/strong>, totaling <strong data-start=\"1849\" data-end=\"1866\">1,284 entries<\/strong>. Using Excel\u2019s RAND function, he selects <strong data-start=\"1908\" data-end=\"1927\">30 transactions<\/strong> at random. He requests full documentation (receipts, approvals, travel forms) for each sampled transaction.<\/p>\n<p data-start=\"2037\" data-end=\"2056\">The results reveal:<\/p>\n<ul data-start=\"2057\" data-end=\"2249\">\n<li data-start=\"2057\" data-end=\"2113\">\n<p data-start=\"2059\" data-end=\"2113\"><strong data-start=\"2059\" data-end=\"2074\">4 out of 30<\/strong> transactions had <strong data-start=\"2092\" data-end=\"2112\">missing receipts<\/strong>.<\/p>\n<\/li>\n<li data-start=\"2114\" data-end=\"2156\">\n<p data-start=\"2116\" data-end=\"2156\"><strong data-start=\"2116\" data-end=\"2155\">2 claims were approved post-payment<\/strong>.<\/p>\n<\/li>\n<li data-start=\"2157\" data-end=\"2249\">\n<p data-start=\"2159\" data-end=\"2249\">One employee submitted expenses for unrelated personal items, later flagged and recovered.<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"2251\" data-end=\"2440\">Auren documents his findings and calculates an exception rate of 23%, which suggests potential issues across the full population. He reports these results to Liora with a recommendation to:<\/p>\n<ul data-start=\"2441\" data-end=\"2572\">\n<li data-start=\"2441\" data-end=\"2471\">\n<p data-start=\"2443\" data-end=\"2471\">Automate pre-approval steps,<\/p>\n<\/li>\n<li data-start=\"2472\" data-end=\"2523\">\n<p data-start=\"2474\" data-end=\"2523\">Enforce receipt attachment before processing, and<\/p>\n<\/li>\n<li data-start=\"2524\" data-end=\"2572\">\n<p data-start=\"2526\" data-end=\"2572\">Provide refresher training on travel policies.<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"2574\" data-end=\"2918\" data-is-last-node=\"\" data-is-only-node=\"\"><strong data-start=\"2574\" data-end=\"2657\">Random sampling helped Auren uncover control lapses efficiently and objectively<\/strong>, without needing to review over a thousand entries. This technique ensures fairness, supports audit conclusions, and helps management take timely corrective action. In fieldwork, <strong data-start=\"2837\" data-end=\"2918\" data-is-last-node=\"\">sampling is a smart, scalable way to see the big picture from a small window.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>1. Introduction to the TechniqueRandom sampling is a statistical tool used by internal auditors to select a subset of transactions or data from a larger population for testing. The goal is to provide reasonable assurance about the entire population by evaluating just a portion of it. This technique is especially helpful when auditing high-volume processes [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":784,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[22],"tags":[],"class_list":["post-894","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tt-internal-audit"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/e.americanpro.org\/wp-content\/uploads\/2025\/06\/Eye-1.gif","_links":{"self":[{"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/posts\/894","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=894"}],"version-history":[{"count":1,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/posts\/894\/revisions"}],"predecessor-version":[{"id":1302,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/posts\/894\/revisions\/1302"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/media\/784"}],"wp:attachment":[{"href":"https:\/\/e.americanpro.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=894"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=894"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=894"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}