### What is Sampling

Sampling is a process used in statistical analysis in which a predetermined number of observations are taken from a larger population. The methodology used to sample from a larger population depends on the type of analysis being performed but may include simple random sampling or systematic sampling.

In business, a CPA performing an audit uses sampling to determine the accuracy of account balances in the financial statements, and managers use sampling to assess the success of the firm’s marketing efforts.

#### Sampling

### BREAKING DOWN Sampling

The sample should be a representation of the entire population. When taking a sample from a larger population, it is important to consider how the sample is chosen. To get a representative sample, the sample must be drawn randomly and encompass the whole population. For example, a lottery system could be used to determine the average age of students in a university by sampling 10% of the student body.

### Factoring in Systematic Sampling

Systematic sampling uses a random starting point and a periodic interval to select items for a sample. The sampling interval is calculated as the population size divided by the sample size. Assume that a CPA is auditing the internal controls related to the cash account and wants to test the company policy that stipulates that checks exceeding $10,000 must be signed by two people.

The accountant's population consists of every company check exceeding $10,000 during the fiscal year, which, in this example, was 300. The CPA firm uses probability statistics and determines that the sample size should be 20% of the population or 60 checks. The sampling interval is 5 (300 checks/60 sample checks); therefore, the CPA selects every fifth check for testing. Assuming no errors are found in the sampling test work, the statistical analysis gives the CPA a 95% confidence rate that the check procedure was performed correctly. The CPA tests the sample of 60 checks and finds no errors; the accountant concludes that the internal control over cash is working properly.

### Examples of Sample Tests for Marketing

Businesses aim to sell their products and/or services to target markets. Before presenting products to the market, companies generally identify the needs and wants of their target audience. To do so, they may employ using a sample of the population to gain a better understanding of those needs to later create a product and/or service that meets those needs. Gathering the opinions of the sample helps to identify the needs of the whole.