Auditing & Assurance › Audit Sampling
What are the limitations and risks of relying on sampling?
AdvancedAnswer
Sampling inherently accepts sampling risk—the sample may not reflect the population, missing errors (over-reliance/incorrect acceptance) or wrongly rejecting good populations. Poorly designed samples, unrepresentative selection, small sizes, or ignoring the population's nature undermine conclusions. Sampling also can't reliably detect rare but material items unless value-weighted or specifically targeted.
Real-world example A rare but material fraudulent transaction might not appear in a random sample, so it's targeted via specific selection or analytics instead.