Evaluating errors in a record sample

After you have performed your audit procedures on the set of sampled data you can use Analytics to:

• project any errors you found to the entire population
• calculate an upper limit on the deviation rate

Even if you found no errors, you still use the evaluation feature to calculate the basic allowance for sampling risk.

How evaluation and comparison work

When you evaluate, Analytics uses a statistical formula to project the errors you found in the sample to the entire population, and calculates the Upper error limit frequency (computed upper deviation rate).

You compare the calculated value to the Upper Error Limit (%) that you decided upon earlier when you calculated sample size. Based on the comparison, you decide if a prescribed control is operating effectively.

Comparison	Conclusion
Upper error limit frequency is less than or equal to Upper Error Limit (%)	The prescribed control is operating effectively
Upper error limit frequency is greater than Upper Error Limit (%)	The prescribed control is not operating effectively

Steps

1. Select Sampling > Record/Monetary Unit Sampling > Evaluate.

   Note

   The menu option is disabled if a table is not open.

2. On the Main tab, select Record.
3. Enter the input values to use for evaluating errors:
   • Confidence
   • Sample Size

     Note

     Enter the actual sample size as drawn, which might differ from the sample size initially calculated by Analytics.

   • Number of Errors

   Note

   The input values are explained in detail below.

4. On the Output tab:
   1. In the To panel, select one of the following:
      • Screen displays the results in the Analytics display area
      • File saves or appends the results to a text file

        The file is saved outside Analytics.

   2. If you selected File as the output type, do one of the following:
      • Enter a file name in the Name text box.
      • Click Name and enter the file name, or select an existing file in the Save or Save File As dialog box to overwrite or append to the file.

        If Analytics prefills a file name, you can accept the prefilled name, or change it.

        You can also specify an absolute or relative file path, or navigate to a different folder, to save or append the file in a location other than the project location. For example: C:\Results\Output.txt or Results\Output.txt.

      Note

      ASCII Text File or Unicode Text file (depending on which edition of Analytics you are using) is the only option for File Type.

5. Click OK.
6. If the overwrite prompt appears, select the appropriate option.

Evaluate dialog box inputs

The table below provides detailed information about the input values in the Evaluate dialog box.

Main tab – input values

Input values – Evaluate dialog box	Description
Confidence	The same confidence level that you entered when you calculated the sample size. For more information, see Calculating sample size for a record sample.
Sample Size	The number of records in the sample. Note Sample Size is the actual sample size as drawn, which might differ from the sample size initially calculated by Analytics.
Number of Errors	The total number of errors, or deviations, that you found in the sample.

 

The figure below shows an example of input values for evaluating errors in a record sample.

Result

Evaluating the errors you found in a record sample produces the following result:

Input value	Description
Upper error limit frequency (computed upper deviation rate)	An adjusted deviation rate that Analytics calculates is not exceeded in the entire data set, for the confidence level you specified.

The figure below shows the result of evaluating errors found in a record sample.

What “Upper error limit frequency” tells you

The Upper error limit frequency, when compared to the Upper Error Limit (%) that you decided upon when you calculated the sample size, tells you:

• Whether the control you are examining is operating effectively
• If the control is operating effectively, how effectively it is operating