I have come to the conclusion that there are simply no good books on statistical sampling for novice practitioners. A lot of the literature begins by covering statistical principles, which is important, but statistics is such a large field that most people get turned off or lost. There is also a lot about the field of statistics that we don’t need to know, for our purposes. Which brings me to my latest book recommendation.
“Audit Sampling: An Introduction”, by Dan Guy, Douglas Carmichael, and Ray Whittington, is perhaps the best book that I have been able to find. I have the Third Edition of this textbook and it is the most concise textbook that I have found on the subject. It is laid out precisely for auditors, meaning that there are not too many side-bars into statistical or mathematical theory. It is the closest thing that I have found to a step-by-step guide for audit sampling, although that is not what this book is. It is a textbook, in the traditional sense. It also includes some excellent appendices, such as the full text of Statement of Auditing Standards (SAS) No. 39: Audit Unit (AU) 350 – Audit Sampling.
I recently revisited this textbook while preparing for some discussions for an upcoming project. This inspired me to put together a presentation to try to condense the topic of statistical sampling of physical inventory down to its simplest tasks: Planning, Selection, and Evaluation.
In the Planning phase, we are concerned with establishing the statistical parameters, such as the confidence level and margin of error – which, in many cases, are given to us. We use those parameters during this phase to calculate the sample size (see my previous post).
The Selection phase is concerned with randomly choosing the samples to be tested.
Finally, the Evaluation phase consists of testing the samples, computing the results, and reporting our findings.
I put together a slightly expanded version of the above in my own Sampling Guide, available for download from this link.