Auditing & Assurance › Audit Sampling
How do you project (extrapolate) misstatements from a sample?
AdvancedAnswer
Project the misstatements found in the sample to the whole population—e.g., in classical variables sampling, ratio or difference estimation; in MUS, using the tainting of sampled units and the sampling interval. Add an allowance for sampling risk to get an upper misstatement limit, and compare it to tolerable misstatement to conclude.
Simple projection (ratio):
Sample error / Sample value x Population value = projected error.Real-world example A 2% error rate in the sampled dollars projects to a $40,000 estimated misstatement across the population.