Audit testing procedures

Example: Quantitative analysis: control testing

The purpose of the quantitative analysis is to estimate the actual level of exceptions in each stratum.
Stratum 1
Sub-stratum Beta: No exceptions found.

Sub-stratum Gamma: Five random exceptions (or deviations) were detected. The sample occurrence rate [e/n] is equal to 5/20 i.e. 25%. As the auditor previously estimated the total number of credit advices approved by Gamma during the year was 2,275, the sample occurrence rate provides the auditor with the estimated number of deviations in this sub-stratum, namely 25% of an estimated 2,275 credit advices i.e. 569.

Stratum 2
No exceptions (deviations) were found.

The total exceptions found may be summarized as follows:

Stratum Employee Number of
exceptions
1 Beta Nil
1 Gamma 569
2 Beta Nil
569

Thus, the estimated actual deviation rate in the estimated total population of 6,500 credit advices is 9% (i.e. 569/6,500 x 100). The next step is to compare this estimated actual rate with the tolerable rate of deviation.

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