Sampling risk and non-sampling risk
Sampling risk:-
Sampling risk relates to the
possibility that a properly drawn sample may, by chance, not be representative
of the population.
It is the risk that the auditor’s
conclusion about internal controls or the details of transactions and balances
based on a sample may be different from the conclusion that would result from
an examination of the entire population.
Non-Sampling Risk:-
Non – sampling risk refers to the
component of audit risk that is not due to examining only a portion of the
data.
Sources of sampling risk include
failing to recognize errors in documents and relying on erroneous information
received from third parties.
Non sampling risk can never be
mathematically measured.