Audit Sampling
Applying procedures to less than 100 percent of a population to draw a conclusion about the whole.
AUD loves to make you match the sampling method to the audit objective: attribute sampling tests controls (estimating a deviation/occurrence rate), while classical variables or PPS sampling tests dollar balances (estimating misstatement). The classic trap is the two-sided error pair. For controls, the risk of overreliance (assessing control risk too low) is the effectiveness killer the exam cares about, while underreliance only wastes work; for substantive tests, incorrect acceptance (concluding a materially misstated balance is fine) is the dangerous error, incorrect rejection merely costs extra testing. The acceptance/overreliance errors threaten the opinion.
A reliable tell: lower tolerable rate or tolerable misstatement, or higher desired confidence, drives sample size UP, and a larger expected error also raises it. Don’t confuse sampling risk (the sample isn’t representative) with nonsampling risk (wrong procedure or misread result) — only the former shrinks by enlarging the sample. Sampling is one technique for gathering evidence; it never substitutes for evidence that is sufficient and appropriate.
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