A quantitative audit with limited representativeness
A company reviews eighty transactions and finds twelve missing required internal approvals. The sample contains only easy consumer-goods orders even though the business also handles technical files, sensitive destinations, intermediaries, and defense-related assistance. Management wants to report the sample percentage as a proven rate for the entire business and close the issue after correcting one invoice. The same outdated system field appears in several exceptions, suggesting a common cause. A merger is adding a distributor with unfamiliar markets, but the integration plan does not include compliance staff. The reviewer must report the arithmetic honestly, explain the limits of the sample, and connect remediation and future testing to actual business risks.
1. Compute and qualify the sample result.
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Twelve divided by eighty is fifteen percent. It is the observed exception rate in this sample, not a validated estimate of every transaction’s rate. Narrow selection limits what the audit shows about higher-risk or different activities.
2. What should follow from the findings?
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Investigate common causes, repair the data and workflow, assign accountable corrective actions, and test effectiveness. Expand appropriate risk-based review to technical and sensitive activities and include acquisition due diligence and integration rather than assuming one corrected invoice resolves the systemic issue.