Sampling and non-sampling risk Discuss what is meant by "sampling risk" and "nonsampling risk"
Sampling risk occurs when the sample is not representative of the population; that is, the characteristics of interest in the sample are not the same as those in the population. Sampling risk is the risk that the auditor's conclusion based on a sample might be different from the conclusion that would be reached if the audit procedure were applied in the same way to the entire population.
The risk that the auditor reaches an erroneous conclusion for any reason not related to sampling risk is referred to as nonsampling risk. Nonsampling risk occurs when audit tests do not uncover existing exceptions in the sample. Nonsampling risk could also be due to a lack of knowledge of the auditor performing the audit procedure.
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