Nonsampling risk definition
/What is Nonsampling Risk?
Nonsampling risk includes all audit risks other than sampling risk . Or, stated differently, nonsampling risk is the probability of arriving at an incorrect conclusion, despite having selected a correct sample.
Examples of Nonsampling Risk
Examples of nonsampling risk are as follows:
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Applying inappropriate audit procedures to an audit.
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Errors on how audit test results are collected. For example, an auditor might record client responses to questions incorrectly.
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The failure to detect a material misstatement over the course of an audit.
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The misinterpretation of audit test results, which can be caused by having preconceived notions about what the results should be.
How to Reduce Nonsampling Risk
A high level of audit planning and review can minimize the amount of nonsampling risk.