Sampling Risk

Read the overview below and complete the activities that follow.

When performing a test of controls, auditors must be concerned with two aspects of sampling risk: assessing control risk too high and assessing control risk too low.

CONCEPT REVIEW:

Assessing control risk too high is the risk that the sample results will cause the auditors to assess control risk higher than warranted based on the actual operating effectiveness of the control. Assessing control risk too low is the more important risk that the sample results will cause the auditors to assess risk at a lower level than warranted.

There are two options- affects audit efficiency and affects audit effectiveness. Both have two slots.

1. Not performing enough testing (Assuming not enough risk)- does it affect audit efficiency or effectiveness?
2. Assessing control risk too low (Assuming not enough risk)- does it affect audit efficiency or effectiveness?
3. Assessing control risk too high (Assuming too much risk)- does it affect audit efficiency or effectiveness?
4. Performing more testing than necessary (Assuming risk too high)- does it affect audit efficiency or effectiveness?