chapter 5 audit sampling

Question 1

non sampling risk

Answer 1

human error, misinterpreting audit test results

Question 2

sampling risk

Answer 2

bad sample, risk of drawing wrong conclusion

Question 3

type I - efficiency error (alpha)

Answer 3

• population is ok but based on sample, dont rely
  
  • underrely = asses RMM too high
  • incorrectly reject an account balance

Question 4

Type II - less effective (beta risk)

Answer 4

• population is bad but auditor believes everything is correct
  
  • overrely on IC = RMM too low
  • incorrectly accept