Webclass 104: Sampling versus rule-based analytics versus AI - which works best?

Q1. When might it be a good idea to use sampling?

To get an overview of how the business process and internal controls are working, SOX review or external audit review, or when time is limited

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To detect fraud

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Q2. How do we calculate the sample size?

Sample size (N) = Population value (P)/ Interval (J)

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Sample size (N) = Interval (J)/Population value (P)

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Q3. What is the Monetary Precision?

The maximum value of error acceptable for the audit

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The minimum value of error expected

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Q4. If we think that there are a lot of risks, should we put 3 or 0.7 as the R-value?

3

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0.7

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Q5. How do we calculate the interval (J)?

Monetary Precision (MP)/ Level of confidence (R)

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Level of confidence (R) /Monetary Precision (MP)

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Q6. When taking a sample from the general ledger, does it make more sense to use a table that is a summary of total value per journal entry or that is the original full list of all journal entry lines?

Summary of total value per journal entry

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Original full list of all journal entry lines

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Q7. Why might we want to use a threshold or cut-off?

To ensure that only transactions above a certain value are chosen in the sample

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To ensure that only transactions below a certain value are chosen in the sample?

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Q8. What is the advantage of using ACL for sampling?

It is repeatable, in case we need to prove why the particular sample was chosen at a later date

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It helps us to ensure that the sample size is not too big

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Q9. What is an inconvenience for external auditors of using ACL?

The sample size computed by ACL can often be too large for the time given to do the audit

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The sample size computed by ACL can often be too small

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Q10. How can external auditors “cheat” to get a smaller sample size?

They can play around with the MP or the R to increase the interval

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They can first run some analysis to pre-categorize the data and then take the sample from the population sub-set

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Q11. How can we reduce the number of exceptions in exception reports?

Automate the taking of samples at the end of every exception report

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Run correlation on all exception reports

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Q12. Why might we use Correlation?

Correlation helps us to create a risk score per third party or transaction and so can help us to choose samples more quickly, or see risk areas more quickly

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Correlation helps us to automate the taking of samples from the data analytics results

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Webclass 104: Sampling versus rule-based analytics versus AI – which works best?

Webclass 104: Sampling versus rule-based analytics versus AI – which works best?

admin June 9, 2026

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