In short
Sampling risk is the risk that the auditor's conclusion based on a sample differs from the conclusion it would reach if it tested the whole population.
Key takeaways
- For tests of controls it means wrongly concluding control risk is lower (risk of overreliance) or higher than it is.
- For substantive tests it means wrongly accepting or wrongly rejecting a balance.
- Larger samples reduce it; nonsampling risk, such as misreading evidence, is not affected by sample size.
Where it's tested
AUD: Audit Sampling — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Which sampling risk is most concerning because it leads the auditor to an incorrect conclusion about the financial statements?