{"id":898,"date":"2020-01-30T13:50:43","date_gmt":"2020-01-30T13:50:43","guid":{"rendered":"https:\/\/alminawi.com\/?p=898"},"modified":"2025-12-07T18:21:32","modified_gmt":"2025-12-07T18:21:32","slug":"tts-series-e-internal-audit-fieldwork-and-evidence-collection-episode-08-judgmental-sampling","status":"publish","type":"post","link":"https:\/\/e.americanpro.org\/?p=898","title":{"rendered":"T&#038;Ts Series E, Internal Audit, Fieldwork and Evidence Collection, Episode 07C: (Judgmental) Sampling"},"content":{"rendered":"<p data-start=\"105\" data-end=\"758\"><strong data-start=\"105\" data-end=\"141\">1. Introduction to the Technique<\/strong><br data-start=\"141\" data-end=\"144\" \/><strong data-start=\"144\" data-end=\"167\">Judgmental sampling<\/strong>, also known as <strong data-start=\"183\" data-end=\"224\">non-statistical or purposive sampling<\/strong>, is a method where the internal auditor selects items for testing based on professional judgment, experience, and risk assessment, rather than random or systematic selection. It is especially useful when the auditor wants to focus on <strong data-start=\"459\" data-end=\"511\">transactions that are more likely to have errors<\/strong>, such as high-value items, unusual entries, or areas where past issues have occurred. Unlike statistical methods, this technique doesn\u2019t aim to generalize results across the population but rather to detect significant risks or control weaknesses.<\/p>\n<p data-start=\"760\" data-end=\"886\"><strong data-start=\"760\" data-end=\"818\">2. Practical Template for Applying Judgmental Sampling<\/strong><br data-start=\"818\" data-end=\"821\" \/>A simple and effective template for judgmental sampling includes:<\/p>\n<ul data-start=\"888\" data-end=\"1340\">\n<li data-start=\"888\" data-end=\"971\">\n<p data-start=\"890\" data-end=\"971\"><strong data-start=\"890\" data-end=\"909\">Audit Objective<\/strong> (e.g., Assess effectiveness of travel expense reimbursements)<\/p>\n<\/li>\n<li data-start=\"972\" data-end=\"1057\">\n<p data-start=\"974\" data-end=\"1057\"><strong data-start=\"974\" data-end=\"995\">Sampling Criteria<\/strong> (e.g., amounts over $5,000, weekend travel, repeat travelers)<\/p>\n<\/li>\n<li data-start=\"1058\" data-end=\"1132\">\n<p data-start=\"1060\" data-end=\"1132\"><strong data-start=\"1060\" data-end=\"1078\">Items Selected<\/strong> (Transaction ID, Employee, Date, Amount, Description)<\/p>\n<\/li>\n<li data-start=\"1133\" data-end=\"1193\">\n<p data-start=\"1135\" data-end=\"1193\"><strong data-start=\"1135\" data-end=\"1159\">Reason for Selection<\/strong> (Why this transaction was chosen)<\/p>\n<\/li>\n<li data-start=\"1194\" data-end=\"1270\">\n<p data-start=\"1196\" data-end=\"1270\"><strong data-start=\"1196\" data-end=\"1214\">Test Performed<\/strong> (Document review, policy compliance, approval validity)<\/p>\n<\/li>\n<li data-start=\"1271\" data-end=\"1320\">\n<p data-start=\"1273\" data-end=\"1320\"><strong data-start=\"1273\" data-end=\"1292\">Result\/Findings<\/strong> (Pass\/Fail, control issues)<\/p>\n<\/li>\n<li data-start=\"1321\" data-end=\"1340\">\n<p data-start=\"1323\" data-end=\"1340\"><strong data-start=\"1323\" data-end=\"1340\">Auditor Notes<\/strong><\/p>\n<\/li>\n<\/ul>\n<p data-start=\"1342\" data-end=\"1478\">This template helps maintain transparency in how and why specific items were chosen and keeps the process aligned with audit objectives.<\/p>\n<p data-start=\"1480\" data-end=\"1857\"><strong data-start=\"1480\" data-end=\"1550\">3. Application at ACME Corp: Travel &amp; Entertainment Expenses Audit<\/strong><br data-start=\"1550\" data-end=\"1553\" \/>At <strong data-start=\"1556\" data-end=\"1569\">ACME Corp<\/strong>, CEO <strong data-start=\"1575\" data-end=\"1584\">Liora<\/strong> has requested an audit of <strong data-start=\"1611\" data-end=\"1652\">Travel &amp; Entertainment (T&amp;E) expenses<\/strong>, citing concerns over potential abuse. <strong data-start=\"1692\" data-end=\"1718\">Internal Auditor Auren<\/strong>, with support from <strong data-start=\"1738\" data-end=\"1762\">Project Manager Aven<\/strong>, decides to use <strong data-start=\"1779\" data-end=\"1802\">judgmental sampling<\/strong> to review T&amp;E reimbursements from the last six months.<\/p>\n<p data-start=\"1859\" data-end=\"1935\">Using the judgmental template, Auren identifies these <strong data-start=\"1913\" data-end=\"1934\">sampling criteria<\/strong>:<\/p>\n<ul data-start=\"1936\" data-end=\"2073\">\n<li data-start=\"1936\" data-end=\"1968\">\n<p data-start=\"1938\" data-end=\"1968\">Expense claims over <strong data-start=\"1958\" data-end=\"1968\">$5,000<\/strong><\/p>\n<\/li>\n<li data-start=\"1969\" data-end=\"1998\">\n<p data-start=\"1971\" data-end=\"1998\">Trips approved by exception<\/p>\n<\/li>\n<li data-start=\"1999\" data-end=\"2040\">\n<p data-start=\"2001\" data-end=\"2040\">Travel overlapping with public holidays<\/p>\n<\/li>\n<li data-start=\"2041\" data-end=\"2073\">\n<p data-start=\"2043\" data-end=\"2073\">Claims from frequent travelers<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"2075\" data-end=\"2188\">From over 1,000 T&amp;E reports, Auren selects <strong data-start=\"2118\" data-end=\"2137\">30 transactions<\/strong> matching one or more of the criteria. For example:<\/p>\n<ul data-start=\"2189\" data-end=\"2430\">\n<li data-start=\"2189\" data-end=\"2269\">\n<p data-start=\"2191\" data-end=\"2269\">A $7,200 claim from a senior sales executive for a client dinner in Las Vegas.<\/p>\n<\/li>\n<li data-start=\"2270\" data-end=\"2348\">\n<p data-start=\"2272\" data-end=\"2348\">A weekend hotel stay reimbursed during a business trip scheduled for Monday.<\/p>\n<\/li>\n<li data-start=\"2349\" data-end=\"2430\">\n<p data-start=\"2351\" data-end=\"2430\">Three reports from the same employee, each barely under the approval threshold.<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"2432\" data-end=\"2457\">Upon review, Auren finds:<\/p>\n<ul data-start=\"2458\" data-end=\"2651\">\n<li data-start=\"2458\" data-end=\"2510\">\n<p data-start=\"2460\" data-end=\"2510\"><strong data-start=\"2460\" data-end=\"2491\">Five claims lacked receipts<\/strong>, breaching policy.<\/p>\n<\/li>\n<li data-start=\"2511\" data-end=\"2558\">\n<p data-start=\"2513\" data-end=\"2558\"><strong data-start=\"2513\" data-end=\"2557\">Two trips were not properly pre-approved<\/strong>.<\/p>\n<\/li>\n<li data-start=\"2559\" data-end=\"2651\">\n<p data-start=\"2561\" data-end=\"2651\"><strong data-start=\"2561\" data-end=\"2616\">One report included personal entertainment expenses<\/strong>, violating ACME\u2019s code of conduct.<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"2653\" data-end=\"2822\">These findings are <strong data-start=\"2672\" data-end=\"2707\">not statistically generalizable<\/strong>, but they uncover <strong data-start=\"2726\" data-end=\"2772\">control breakdowns and behavioral patterns<\/strong> that would have been missed with random sampling.<\/p>\n<p data-start=\"2824\" data-end=\"2856\">In his report, Auren recommends:<\/p>\n<ul data-start=\"2857\" data-end=\"2978\">\n<li data-start=\"2857\" data-end=\"2889\">\n<p data-start=\"2859\" data-end=\"2889\">Tightening policy enforcement.<\/p>\n<\/li>\n<li data-start=\"2890\" data-end=\"2927\">\n<p data-start=\"2892\" data-end=\"2927\">Mandatory pre-approvals for travel.<\/p>\n<\/li>\n<li data-start=\"2928\" data-end=\"2978\">\n<p data-start=\"2930\" data-end=\"2978\">A monthly exception report for executive review.<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"2980\" data-end=\"3270\" data-is-last-node=\"\" data-is-only-node=\"\"><strong data-start=\"2980\" data-end=\"3003\">Judgmental sampling<\/strong>, when applied with clear criteria and professional skepticism, enables internal auditors like Auren to target <strong data-start=\"3114\" data-end=\"3157\">high-risk areas quickly and effectively<\/strong>, making it a vital tool for focused audits where <strong data-start=\"3207\" data-end=\"3229\">quality of insight<\/strong> matters more than statistical inference.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>1. Introduction to the TechniqueJudgmental sampling, also known as non-statistical or purposive sampling, is a method where the internal auditor selects items for testing based on professional judgment, experience, and risk assessment, rather than random or systematic selection. It is especially useful when the auditor wants to focus on transactions that are more likely to [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":809,"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-898","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\/17.png","_links":{"self":[{"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/posts\/898","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=898"}],"version-history":[{"count":1,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/posts\/898\/revisions"}],"predecessor-version":[{"id":1300,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/posts\/898\/revisions\/1300"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/media\/809"}],"wp:attachment":[{"href":"https:\/\/e.americanpro.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}