Sampling risk
Financial Dictionary — Auditing Risk
Definition
The risk that the auditor’s conclusion based on a sample differs from the conclusion if the entire population were tested.
Detailed Explanation
Sampling risk is the risk that conclusions drawn from an audit sample differ from conclusions if the entire population were tested.
Common Uses
- Used in audit planning to understand risks and design procedures.
- Used during testing (controls/substantive) and documentation of audit evidence and conclusions.
- Used during testing (controls/substantive) and documentation of audit evidence and conclusions.
Practical Example
- Example: The auditor references **Sampling risk** when designing procedures and documenting conclusions in the audit file.
Why This Term Matters
- Why it matters: Supports high-quality, defensible audit conclusions and helps detect material misstatements and control weaknesses.