Wiley Practitioner's Guide to GAAS 2018, 2nd Edition

AU-C 530 Audit Sampling

AU-C Original Pronouncement

Source

Statement on Auditing Standards (SAS) 122.

AU-C Definitions of Terms

Source: AU-C 530.04

1. Audit sampling (sampling). The selection and evaluation of less than 100% of the population of audit relevance such that the auditor expects the items selected (the sample) to be representative of the population and, thus, likely to provide a reasonable basis for conclusions about the population. In this context, representative means that evaluation of the sample will result in conclusions that, subject to the limitations of sampling risk, are similar to those that would be drawn if the same procedures were applied to the entire population.
2. Nonsampling risk. The risk that the auditor reaches an erroneous conclusion for any reason not related to sampling risk.
3. Population. The entire set of data from which a sample is selected and about which the auditor wishes to draw conclusions.
4. Sampling risk. The risk that the auditor's conclusion based on a sample may be different from the conclusion if the entire population were subjected to the same audit procedure. Sampling risk can lead to two types of erroneous conclusions:
   1. In the case of a test of controls, that controls are more effective than they actually are, or in the case of a test of details, that a material misstatement does not exist when, in fact, it does. The auditor is primarily concerned with this type of erroneous conclusion because it affects audit effectiveness ...