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    Differential Evaluation of Audit Evidence from Fixed versus...
    research summary posted November 24, 2014 by Jennifer M Mueller-Phillips, tagged 08.0 Auditing Procedures – Nature, Timing and Extent, 08.02 Sample Selection – use of statistical sampling, 09.0 Auditor Judgment, 09.03 Adequacy of Evidence 
    Differential Evaluation of Audit Evidence from Fixed versus Sequential Sampling
    Practical Implications:

    The results have implications about situations in which others evaluate the auditor’s work after the fact, such as the audit review process or the examination of audit evidence by regulators, jurors, or judges. In such situations, decision makers need to evaluate the strength of previously gathered audit evidence, and to judge the extent to which the evidence supports a previously reached conclusion. Regarding the assessed sufficiency of audit evidence, the results suggest that evaluators of the auditor’s work could require larger sample sizes under sequential sampling than under fixed sampling, to support the same level of confidence in the auditor’s opinion. Although sequential sampling might in fact increase audit efficiency, the findings suggest that this benefit could be negated by subsequent unfavorable assessment of audit evidence from a sequential sampling plan.

    For more information on this study, please contact Marietta Peytcheva.


    Gillett, P. R., and M. Peytcheva. 2011. Differential evaluation of audit evidence from fixed versus sequential sampling. Behavioral Research in Accounting 23 (1): 65-85. 

    sampling plan; audit evidence; evidence evaluation; stopping rules
    Purpose of the Study:

    The authors examine whether the assessed value of audit evidence depends on whether it was collected using fixed or sequential sampling. Opposing views are held by the two main schools of statistical theory: Bayesian statisticians maintain the value of audit evidence is the same, regardless of the sampling plan, whereas frequentist statisticians argue the sampling plan should affect evidence evaluation. This study tests empirically how using fixed versus sequential sampling plans influences the subsequent evaluation of audit evidence.

    Design/Method/ Approach:

    In two experiments, audit students and practicing auditors assess the strength of audit evidence obtained using different sampling plans. The experimental task involves testing of internal controls as part of the audit of the revenue cycle. The research evidence is collected in 2005—2008.


    Audit evidence obtained from a fixed sampling plan is invariably assessed as stronger, by both audit students and practicing auditors. This finding is consistent with frequentist statistical theory, but not with Bayesian theory. Participants in the first experiment who considered the fixed sampling plan (the plan more widely used in audit practice) were prone to consider additional factors (such as whether or not they had gathered the evidence themselves) in their assessment of the strength of observed audit evidence. Participants exposed to the sequential plan, however, did not respond to these additional factors but assigned generally lower strength to evidence obtained from a sequential plan. Qualitative data on the reasoning behind auditors’ observed preferences suggest that auditors perceive fixed sampling plans as unbiased. Sequential plans, in contrast, are perceived to leave room for bias. The main concern auditors report regarding the sequential sampling plan is that this plan presents samplers with an opportunity to influence the test results by increasing or altering sample size until the desired results are observed.

    Auditing Procedures - Nature - Timing and Extent, Auditor Judgment
    Adequacy of Evidence, Sample Selection – use of statistical sampling