Student Forums CIA Part 2: Practice of Internal Auditing Section III: Performing the Engagement Question ID: CIA 1196 II.41 (Topic: 1C. Apply Sampling and Statistical Analysis

# Question ID: CIA 1196 II.41 (Topic: 1C. Apply Sampling and Statistical Analysis

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Denny Benjamin
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Hi,

What is the meaning of the term “When all strata are of approximate value” or “approximate value”?

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Brian Hock
HOCK international

Hello, Denny,

Approximate value means that they are of about the same value. In this question, there is some difference between the total value, but not a huge dollar amount of difference. So, the auditor will do the most testing in the strata (group) that has the highest standard deviation. If one of the state had a Toal value of \$3,000,000 while the other remained below \$500,000, then the answer would change to the group with a balance of \$3,000,000. But since there is not such a large strata, the highest standard deviation will draw the most attention.

Brian

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Denny Benjamin
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Thank you Brian.  That explanation and example has cleared my doubt.

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