Haphazard Sampling: Selection Biases and the Estimation Consequences of These Biases

This article summarizes our recent study, “Haphazard Sampling: Selection Biases Induced by Control Listing Properties and the Estimation Consequences of These Biases” (Hall et al. 2012). Haphazard sampling is a nonstatistical technique used by auditors to simulate random sampling when testing the error status of accounting populations. Our study compared the properties of haphazard samples selected from control listings with the properties of random samples. We hypothesized that haphazard samples differ from random samples because the haphazard selection process is influenced by: (1) auditor behaviors intended to minimize sample selection effort and to ensure a diversified sample composition, and (2) variations in the appearance of control listing entries. Results from three experiments confirmed multiple differences between haphazard samples and random samples, and suggest that haphazard sampling may not be a reliable substitute for random sampling. In the absence of effective remediation procedures, continued use of haphazard sampling may expose auditors to additional audit, legal, and regulatory risk.