If an auditor is sampling to test compliance with a particular company policy, which of the following factors should not affect the allowable level of sampling risk?
If an auditor is sampling to test compliance with a particular company policy, which of the following factors should not affect the allowable level of sampling risk?
The experience and knowledge of the auditor should not affect the allowable level of sampling risk because sampling risk pertains to the inherent uncertainty in using a sample to draw conclusions about the entire population. Factors like the adverse consequences of noncompliance, the acceptable level of risk of making an incorrect audit conclusion, and the cost of performing auditing procedures on sample selections are more directly related to the assessment and management of sampling risk. Hence, the auditor's personal attributes, such as their experience and knowledge, do not influence the inherent sampling risk.
Why A NOT D ???!
Why A if in situation when auditor does not have sufficient knowledge and experience there can be a significant error in sampling process. I don't follow why cost of sampling is important and experiance and knowledge not...
Experience and knowledge are related to the non-sampling risk. Furthermore, it's a compliance audit. The parameters must be correct for the observations to be conclusive. The auditor's experience and knowledge shouldn't influence the attributes or the level of compliance.
Sampling risk is the possibility that engagement conclusions based on a sample may differ from those reached if the test were applied to all items in the population. The experience and knowledge of the auditor are elements of nonsampling risk.
Why not D??
Cost of sample selection may relate to sample size and then impact on the sample risk.