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Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Verification Manual

13. Sampling



13.1 There are two main sampling approaches that may be used in verifications:


13.1.1 Attribute sampling;  and


13.1.2 Monetary unit sampling (MUS)


13.2 When designing verification procedures, the Verification Agency shall determine appropriate means for selecting items for testing so as to gather sufficient and appropriate evidence to meet the objectives of the verification  procedures.


13.3 Verification procedures are concerned with  amounts and include substantive  tests of details and analytical reviews of classes of transactions and account balances. The purpose of verification procedures is to obtain evidence to detect material misstatements.


13.4 It may not be appropriate to select a sample for each Scorecard Element: for example, during the verification  of  complex  shareholding  structures,  sampling would not be appropriate and the Verification Agency should obtain an understanding of the whole structure.


13.5 When designing a sample, the Verification Agency shall consider the objectives of the verification procedure and the attributes of the population from  which  the sample will be drawn.


13.6 In determining the sample size, the Verification  Agency  shall consider whether  risk  of misstatement is reduced to an acceptably low level in their opinion using their professional judgement.


13.7 The Verification Agency shall select items for the sample with the expectation that all sampling units in the population have a chance of selection. (random sampling)


13.8 The Verification Agency shall perform verification procedures appropriate to the particular B-BBEE Code Element Objective for each item selected.


13.9 The Verification Agency shall consider the sample results, the nature and cause of any errors identified, and their possible effect on the particular B-BBEE Code Scorecard Element and on other areas of the verification.


13.10 For tests of detail, where a MUS sample has been selected, the Verification Agency may project monetary errors found in the sample to the population, and shall consider the effect of the projected error on the particular B-BBEE Code Scorecard Element and on other areas of the verification.