In many circumstances auditor apply the audit procedures on the sample rather than the entire population of items in account balance or class of transaction. The auditor use sample due to cost factors and time limitations. Also, use of sample is more practical since even if the auditor would be able to examine the entire population the evidence obtained would not be any better since audit evidence is persuasive rather than conclusive.
However, in the following cases auditor may decide to examine the entire population of account balance or class of transaction rather than use sample .
- When the population constitute a small number of large value items.
- When there is significant risk and other means do not provide sufficient appropriate audit evidence; or
- When the repetitive nature of calculation or other process performed automatically by an information system makes 100 per cent examination cost effective.