Probability proportional to size sampling

Probability proportional to size sampling is also know as
monetary unit sampling or dollar unit sampling. It is a method of sampling that
takes the varying size of each item within the population into account when
selecting the audit sample.

The audit sample size is calculated based on the population itself
and risk factors such as materiality, expected error and required reliability
level (these are judgemental factors that the auditor sets based on the
engagement and specific risks). The sample size is then used to calculate the Sampling
Interval, which is Population/Sample Size. Note that the population is the sum
(total) of the “Amount” column, not the number of items in the population.

Each Dollar/Pound/Euro/Monetary Unit within the population
then has an equal chance of being selected in the audit sample. There are
various different ways of selecting the sample, and the 2 most common are Fixed
Interval and Cell Selection Method.

In Fixed Interval, a random starting point is selected
(between 1 and the sampling interval), and this is the first “Dollar” selected.
The count is then incremented by the sampling interval to select the next and
subsequent items for the audit sample. This is best explained with an example.
Here we have a population of 10 items, with a total value of 1200, and we have
a sample size of 3:

	Value	Cumulative Total
Invoice 1	100	100
Invoice 2	34	134
Invoice 3	23	157
Invoice 4	403	560
Invoice 5	108	668
Invoice 6	78	746
Invoice 7	61	807
Invoice 8	19	826
Invoice 9	285	1111
Invoice 10	89	1200

The sampling interval is 400 (1200/3), so we’d pick a random
start point between 1 and 400, lets say 263 (in reality you would use a random
number generator to pick this start point). So our first item selected would be
Invoice 4, as the cumulative total for 263 lies within item 4. The second
sample item would be at 663 (263+400), or Invoice 5. Our final item would be at
1063, so Invoice 9.

When the Cell Selection Method is used the population is
split into “Cells”, which are the same size as the sampling interval, and a
random Dollar is picked from within each cell. In the above example a random Dollar
would be selected from the first cell (1-400), another from the second (401-800)
and the final from 801-1200. So you might for example select Dollar 102
(Invoice 2), Dollar 799 (Invoice 7) and Dollar 820 (Invoice 8).

When there are large items in the population (larger than
the sampling interval), these are usually extracted first and will definitely be
selected for testing. The remainder of the audit sample is then selected using
either cell selection or fixed interval. In the above example, Invoice 4 would
be considered a large item and would be stripped out.

Once the audit sample has been selected, the auditor then
tests the items, and records any difference between the book (recorded) value,
and the actual value. These differences are then extrapolated over the
population to provide the auditor with estimated error levels.

Due to the complexity of the maths involved in probability
proportional to size sampling, it is virtually impossible to carry out without
the use of specialized software that will calculate the sample size, extract
the audit sample and then evaluate and extrapolate the results. However, with
the use of software it can be incredibly easy to perform probability proportional
to size sampling – have a look at this video, which shows just
how easy it can be using the Monetary Unit Sampling routine in the Excel add-in
TopCAATs.

sumber: http://www.auditsample.com/sampling-techniques/probability-proportional-to-size-sampling