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4:00
YouTube
Edspira
Sampling Risk vs. Nonsampling Risk
Sampling risk and nonsampling risk both involve the auditor making an incorrect decision. Sampling risk is the risk that the sample will not be truly representative of the population. This could result in a Type 1 error (the auditor concludes that the internal controls are ineffective, when they are not, or the auditor concludes that an account ...
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CPAs may decide to apply nonstatistical or statistical techniques to audit testing. a. List and explain the advantages of applying statistical sampling techniques to audit testing. b. List and discuss the decisions involving professional judgment that must be made by the CPAs in applying statistical sampling techniques to tests of controls. c. You have applied attributes sampling to the client's pricing of the inventory and discovered from your sampling that the sample deviation rate exceeds you
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