All 18 Audit Sampling questions
More in Audit Sampling
How does the confidence level relate to sampling? What are the risks of over-reliance and under-reliance (for tests of controls)? What factors affect sample size? What is tolerable misstatement and tolerable rate of deviation? How do you evaluate the results of a control test sample? When is 100% testing or specific-item selection used instead of sampling? How does reliance on internal controls affect substantive sample sizes? What is monetary unit sampling (MUS) and when is it used? How do you project (extrapolate) misstatements from a sample? What do you do when a sample reveals a misstatement or deviation?
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Auditing & Assurance › Audit Sampling

What is stratification and why is it used?

Intermediate

Answer

Stratification divides a population into sub-populations (strata) with similar characteristics—commonly by value—so each is sampled separately. High-value items may be tested 100% while lower-value strata are sampled. This reduces variability within strata, improves efficiency, and focuses effort where misstatement would matter most.
Real-world example The auditor tests all balances over $100k individually and samples the remaining smaller balances separately.

Common follow-ups: How does stratification improve efficiency? | Why test high-value items fully?

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All 18 Audit Sampling questions