To complete testing which sampling method should the auditor use to identify the sample size?

The auditor determines that the population for transaction monitoring testing can be stratified into five distinct categories.

To complete testing which sampling method should the auditor use to identify the sample size?
A . Judgmental
B . Proportional
C . Statistical
D . Risk-based

View Answer

Answer: C

Explanation:

Importance of Statistical Sampling in Transaction Monitoring Testing:

Statistical sampling is the most suitable method when dealing with stratified populations, as it ensures a representative sample is drawn from each distinct category.

This method allows auditors to achieve reliable results by applying mathematical and probabilistic models to calculate the required sample size, ensuring unbiased and valid conclusions​. Relevance to Stratified Populations:

When the transaction monitoring population is divided into distinct categories, statistical sampling ensures that each category is proportionately represented based on its size or risk level within the overall population​.

Evaluation of Other Options:

Judgmental Sampling: Relies on auditor discretion and may introduce bias, making it unsuitable for ensuring proportional representation in stratified populations.

Proportional Sampling: Focuses only on proportional representation but does not leverage statistical tools to determine the optimal sample size or confidence levels.

Risk-Based Sampling: While effective in certain contexts, it is better suited for focusing on high-risk categories rather than ensuring comprehensive representation of all strata. Alignment with Advanced CAMS-Audit Standards:

Advanced CAMS-Audit recommends statistical sampling for stratified populations to ensure that all categories are adequately tested and results are statistically valid for compliance and performance assessments.

Conclusion:

The auditor should use statistical sampling to identify the sample size when testing a stratified population for transaction monitoring. This ensures a reliable, unbiased, and mathematically sound basis for the audit.