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Answer Posted / pradeep maurya
Data stratification helps the auditor/researcher classify data, in order to perform tasks
such as:
• Sample planning
• Audit Planning
• Identification of potential exceptions
• Determining if “outliers” may exist
• Obtaining a better understanding of the population
• Comparison of two components of one population
The procedures described here are an efficient and effective way to stratify the numeric
data in the population being tested.
The data stratification procedure classifies numeric amounts into “buckets” or value
ranges specified by the auditor. The purpose is to classify numeric amounts in order to
determine the most frequently occurring values, largest and smallest values, etc.
Stratification is often used for sample planning (stratified sampling, reasonableness tests)
as well as audit planning in general.
Usage Example 1:----
In a test of accounts payable, classify the invoice amounts into particular ranges for the
purpose of audit planning. Invoices less than $100 do not require a secondary
authorization. Invoices over $50,000 requires three authorizations. All invoices over
$2,500 require a purchase order.
By
Pradeep Maurya
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