Statistical sampling in Audit for the NSO Stratification

Statistical sampling in Audit for the NSO ¬ Stratification ¬ & ¬ Cluster Sampling Comptroller & Auditor General Of India ¬ 1

Statistical sampling in Audit for the NSO Stratified Random Sampling ¬ Population is partitioned into smaller subpopulation , called strata. ¬ These strata should be mutually exclusive and collectively exhaustive & homogeneous according to some characteristics. ¬ Then a sample of ni = n(Ni/N) will be chosen at random from ith strata. I = 1, 2, 3, …. k, Where k is the no. of strata. (Proportional allocation) ¬ This is used to increase precision without increasing cost. Comptroller & Auditor General Of India 2

Statistical sampling in Audit for the NSO Optimum allocation in strata Where, SDi = Standard Deviation of the ith stratum. Ni = No. of items /transactions in ith stratum. = Acceptable margin of error for mean. Zr = Standard Normal value for the desired confidence level. ni = optimum sample size of ith strata. Comptroller & Auditor General Of India 3

Statistical sampling in Audit for the NSO Cluster Sampling ¬ It is used whenever the population is homogeneous but can be partitioned & for practical convenience ¬ The target population is first divided into mutually exclusive and collectively exhaustive subpopulations. ¬ Then a random sample of cluster is selected by SRS. Each selected cluster is either all the units are included or a sample of elements is drawn probabilistically. Comptroller & Auditor General Of India 4

Statistical sampling in Audit for the NSO Stratified Vs. Cluster Sampling ¬ In cluster sampling only a cluster is chosen ¬ Elements within a cluster should be as heterogeneous as possible ¬ It is operationally convenient and possible reduction of costs ¬ In stratified sampling all the strata are chosen for further sampling. ¬ Elements within a strata should be as homogeneous as possible. ¬ It increase the precision of the estimates without increasing costs Comptroller & Auditor General Of India 5

Statistical sampling in Audit for the NSO Comptroller & Auditor General Of India 6