When conducting substantive tests, sampling risk is _______.
A)ignored, due to substantive tests providing a compensating control
B)considered to be the risk that the random sample selected will be representative of the population
C)the risk that an auditor concludes that a material misstatement does not exist when it actually does, or an auditor concludes that a material misstatement exists when it actually does not
D)the risk that an auditor concludes that a material misstatement does exist when it actually does, or an auditor concludes that a material misstatement exists when it actually does not

Question

Quizplus · Accepted Answer

Sampling risk is the risk that an auditor's conclusion based on a sample might be different from the conclusion if the entire population were examined. This includes both the risk of incorrect acceptance (concluding there is no material misstatement when there actually is) and the risk of incorrect rejection (concluding there is a material misstatement when there actually is not).

When Conducting Substantive Tests, Sampling Risk Is _______