Which sampling method is most appropriate for testing automated invoice authorization controls?

Stratified random sampling is particularly effective for testing automated invoice authorization controls because it allows for a more focused and structured approach to sampling. This method involves dividing the entire population of invoices into distinct subgroups, or strata, based on specific characteristics relevant to the testing criteria—such as invoice value, vendor type, or frequency of authorization.

By using stratified random sampling, an auditor can ensure that each subgroup is adequately represented in the sample. This approach enhances the reliability of the audit results because it mitigates the risk of disproportionate influence from any single subgroup. For instance, if high-value invoices are underrepresented, the auditor may miss critical control weaknesses that could lead to significant financial risk.

Additionally, this sampling method is particularly useful when the population is heterogeneous, meaning the invoices vary across different dimensions. By stratifying the population first, the auditor can obtain more precise insights into the effectiveness of the automated controls across different types of invoices. This ultimately leads to more accurate conclusions about the overall effectiveness and consistency of the invoice authorization controls in place.