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CMA Intermediate · Corporate Accounting and Auditing · Audit Sampling, Audit Techniques and Analytical Procedure

Which of the following is an example of non-sampling risk as described in SA 530?

Using an inappropriate audit procedure, or failing to recognise a misstatement in an item examined, is non-sampling risk under SA 530. It arises from errors in the auditor's work, not from the sample being unrepresentative, which would be sampling risk.

  1. AThe sample selected is not representative of the population
  2. BThe auditor uses an inappropriate audit procedure or fails to recognise a misstatement in a sampled itemCorrect
  3. CThe sample size is smaller than a statistical formula indicates
  4. DThe population contains a high value of items

Explanation

SA 530 gives as examples of non-sampling risk the use of inappropriate audit procedures, misinterpretation of audit evidence and failure to recognise a misstatement or deviation. An unrepresentative sample or too small a size relates to sampling risk instead.

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