Reducing the Costs in Estimating the Accounting Misstatements Using Cluster Sampling
Author:
Univ. Prof. Emeritus Elisabeta JABA, Ph. D.; Ioan-Bogdan ROBU, Ph. D.; Mihaela-Alina ROBU, Ph. D. Student
JEL:
C13, C83, M41, M42
DOI:
Keywords:
financial auditing, accounting misstatement, cluster sampling, statistical estimation, audit costs
Abstract:
In an audit engagement, the auditor should issue an independent, objective and a competent opinion on the financial statements of the company, based on the audit evidence obtained. Since the audited units are naturally organized in groups and are spread geographically, such as regional representations, the auditor may use cluster sampling. This type of sampling can significantly reduce the audit costs, while ensuring the sufficiency and appropriateness of audit evidence needed to formulate the audit opinion. The purpose of this study is to estimate the accounting misstatements related to receivables accounts, using the data recorded on a sample of clusters, regional representations. The study objectives were to determine the size of clusters sample that contains the clients proposed for testing, to extract the sample of clusters using SPSS 20.0 and to estimate the average of accounting misstatements on the accounts receivable for the entire population that was studied.