What is haphazard audit sampling?
This is when the auditor attempts to randomly select transactions from the population to test. Although the auditor thinks the approach is completely random, this approach is still somewhat skewed as a human being can’t select anything at random.
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What type of sampling method is used for controls testing?
Attribute sampling will be used primarily for testing internal controls. Attribute sampling will test for seeking specific characteristics. The other type of sampling is variable sampling, which is used for substantive testing.
What is sampling risk?
Sampling risk is considered the risk that the sample will not represent the actual population. When conducting tests based on samples, the assumption is that the sample is indicative of the entire population. The auditor should apply professional judgment in assessing sampling risk. In performing substantive tests of details, the auditor is concerned with two […]
What is risk of incorrect acceptance in audit sampling?
Risk of incorrect acceptance is the risk that the sample allows the auditor to conclude that financial statements are not materially misstated, when in fact they actually are. This will affect the effectiveness of the audit detecting existing material misstatements.