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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  • #239632

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    This forum is restricted to members of the associated course(s).

    Denny Benjamin
    Participant

    Hi, 

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

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  • #239634

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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

    #239636

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    Denny Benjamin
    Participant

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

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