Sample size

vishwam mandepudi

Suppose if there are 1000 sales invoices in total, and out of that auditors wants to check 200 invoices. 200 here is sample size and 1000 is population and each invoice is a sampling unit. Tolerable error is the maximum error in the population that the auditor would be willing to accept and still concludes that the result from the sample has achieved the audit objective. So if the tolerable error is very small, greater shall be the sample size. if sample size is low, the chances of errors could be high and auditor cannot conclude that sample has achieved audit objective.