What do you mean by the sampling of accounting information?
Ans.
Sampling of Accounting Information
The various sampling procedures reveals that we first identify the sampling units of the population and then decide about the particular sampling procedure to be used. As such, while applying any sampling procedure in choosing the accounting records for verification, we first observe the nature of records and then decide about the selection procedure. Most of the accounting records are available either in the form of invoices, or in ledgers. An obvious question is that which methods of sampling will provide a representative sample. In this regard, the commonly used samplings are:
1. Judgement Sampling: This sampling method is generally used by auditors. As already discussed, under this sampling scheme, auditor picks up invoices according to his choice or to whom het considers suitable and checks them. The sampling procedure is although convenient but suffers from human biases and it is usually not feasible to draw valid conclusions for the population with judgement sampling.
2. Systematic Sampling: This sampling plan is applied in a situation when the sampling units are numbered sequentially. Since accounting records are usually on numbered cards or in registers thus systematic sampling is one of the potential method of sampling in this case. Though the sampling procedure is quite easy yet it has certain drawbacks while using this sampling scheme, the accounts or invoices need to be arranged serially after through mixing, otherwise the sample drawn is not a representative sample.
3. Random Sampling: In case accounting records in the population are serially numbered, then as per random sampling procedure a correspondence has to be established between the units of the population and the random numbers. For example, if the number of units in the population is 78 and two digit random number are being used for selecting the units in the sample. Then any number between number 00 to 99 can occur in the random number table but, in the present case, numbers greater than 78 will be discarded from selection in the sample. In this process, a desired number of random numbers will be selected and then the corresponding units in the population will form our sample.
4. Sampling when Accounting Records are not in Order: Judgement, systematic or random sampling can be used for sampling accounting records only when ordered information regarding then is available, i.e., when sampling units are serially numbered. However in situations when accounting records are not in order, say for example, we have a register consisting of 80 pages and the number of entries are un-ordered. Then to select a pre-assigned number of accounting records, we proceed as under:
In such case, we draw four digit random numbers. Of these four digits, we assign the first two digits to the page number and last two for the entry on that page. Thus a selected random number, say 3820 will mean that 20th entry on page 38 is to be selected in the sample. Following in the same way we can select a pre-assigned number of entries. In case the digits in the selected number are such that they do not correspond to either the number of pages or the number of digits on the pages, we discard such random number and select the next. This procedure of sampling is useful when we wish to avoid the labour of numbering each and every entry since their number is very large.
- What is meant by Database Management System?
- Discuss the advantages and drawbacks of database.
- What do you mean by database ? Discuss its Characteristics.
- What is Data Mining?
- What are the conditions of communication?
- What do you mean by business communication ?
- organization / Differentiate between classical and modern theory of organization
- What is forecasting