Question

Each time an auditor draws a conclusion based on evidence from a sample, an additional risk,...

Each time an auditor draws a conclusion based on evidence from a sample, an additional risk, i.e., sampling risk, is introduced. An example of sampling risk is

Properly applying an improper audit procedure to sample data.

Improperly applying a proper audit procedure to sample data.

Projecting the results of sampling beyond the population tested.

Drawing an erroneous conclusion from sample data.

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Answer #1

Sampling risk is risk that auditor may face while performing audit procedure through sampling. Audit sampling exists because it is impractical for auditor to check 100% of records and data. Sampling risk represents the possibility that an auditor's conclusion based on a sample is different from that reached if the entire population were subject to audit procedure. The auditor may conclude that material misstatements exist, when in fact they do not; or material misstatements do not exist but in fact they do exist

Example of sampling risk is: Drwaing an erroneous conclusion from sample data.

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