EXAMPLE
An auditor took a random sample of sales authorizations. Based on the sample, the sales department authorized a sale after checking the credit score of the customer 88% of the time.
• If the confidence interval is 5%, the auditor can be confident that between 83% (88-5%) and 93% (88% + 5%) of all the company's sales were authorized after checking credit scores.
• The confidence level is the auditor’s desired reliability of the sample. If the specified confidence level is 95% and precision is 5%, the auditor can be 95% confident that the percentage of all the company's sales that were authorized after checking credit scores is between 83% and 93%