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Abstract Details

Activity Number: 476
Type: Contributed
Date/Time: Wednesday, August 1, 2012 : 8:30 AM to 10:20 PM
Sponsor: Section on Survey Research Methods
Abstract - #305577
Title: Statistics and Audit Sampling
Author(s): Mary Batcher and Fritz Scheuren*+
Companies: Ernst & Young and NORC
Address: 22 East Monroe, Chicago, IL, , United States
Keywords: sampling ; audit

Probability and judgment samples are extensively used in financial audits. Probability samples need no discussion in this audience. Judgment sampling, even though much maligned, can have a useful role in a discovery context when conducting a compliance audit. Still, probability samples are required if attribute error rates are sought. Seemingly forgotten in recent years is that when problems are found through a discovery judgment sample, there is no direct way to accurately estimate the impact of a control failure. Without a probability sample follow up, conclusions, even if based on multiple judgment samples, can be misleading. The use of now standard meta-analysis tools for multiple judgment samples simply does not work. The nonstatistical intuition is that multiple judgment samples can, somehow, be combined and a stronger inference made. That is simply untrue and has caused much harm in some important cases. The just settled Cobell Indian Trust Case will be used as an example.

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