Swot Analysis On Sampling Method

Audit sampling involves the application of audit procedures to less than 100% of items within an account balance or class of transactions. Our article aims to study audit sampling in audit of financial statements. As an audit technique largely used, in both its statistical and nonstatistical form, the method is very important for auditors. It should be applied correctly for a fair view of financial statements, to satisfy the needs of all financial users. In order to be applied correctly the method must be understood by all its users and mainly by auditors. Otherwise the risk of not applying it correctly would cause loose of reputation and discredit, litigations and even prison. Since there is not a unitary practice and methodology for applying the technique, the risk of incorrectly applying it is pretty high. The SWOT analysis is a technique used that shows the advantages, disadvantages, threats and opportunities. We applied SWOT analysis in studying the sampling method, from the perspective of three players: the audit company, the audited entity and users of financial statements. The study shows that by applying the sampling method the audit company and the audited entity both save time, effort and money. The disadvantages of the method are difficulty in applying and understanding its insight. Being largely used as an audit method and being a factor of a correct audit opinion, the sampling method’s advantages, disadvantages, threats and opportunities must be understood by auditors.