Overview: The purpose of auditing is to identify failures in the system or gross negligence.
The real question, "how bad does the system need to be for auditing to work?" This talk will look at statistical distribution for rare events to show that the sample size needs to larger when the systems are better. This is a paradox for most auditors who when a problem is discovered increase their sample size.
Most auditing sampling plans are based on either the binomial or normal distribution, though rare events usually follow the Poisson distribution. This talk will show how the Poisson relates to the binomial and normal distributions. Special attention will be given to risk management strategies. A review and comparison of different sampling strategies will be presented.
Areas Covered in the Session: - Different types of sampling plans.
- Measurement Error
- Power Calculation
- Types of Risk
- Different Statistical distributions used for audit sampling
Who Will Benefit: - Management
- Research and Development
- Regulatory Affairs personnel
- Quality assurance/quality control personnel
- Auditors and inspectors
