Non-sampling risk arises from factors like inexperienced staff or time pressure.

Non-sampling risk arises from factors like inexperienced staff or time pressure.

• A. It arises from sampling error only.
• B. It arises from inexperienced staff or time pressure.
• C. It arises from errors detected by controls.
• D. It arises from the client's misstatement.

Answer: (B)

Non-sampling risk is the risk that the auditor’s conclusion is wrong for reasons other than how the sample was chosen or drawn. Factors like inexperienced staff or time pressure fit this idea because they can lead to mistakes in planning, performing, or evaluating audit procedures, regardless of the size or representativeness of the sample. This is different from sampling risk, which comes from the possibility that the sample doesn’t reflect the population. It isn’t about errors detected by controls or about the client’s misstatement itself (which relates to inherent and control risks and the overall audit risk). So, feeling that inexperience or tight timelines can cause errors in the audit work is the correct way to understand non-sampling risk.

Non-sampling risk is the risk that the auditor’s conclusion is wrong for reasons other than how the sample was chosen or drawn. Factors like inexperienced staff or time pressure fit this idea because they can lead to mistakes in planning, performing, or evaluating audit procedures, regardless of the size or representativeness of the sample. This is different from sampling risk, which comes from the possibility that the sample doesn’t reflect the population. It isn’t about errors detected by controls or about the client’s misstatement itself (which relates to inherent and control risks and the overall audit risk). So, feeling that inexperience or tight timelines can cause errors in the audit work is the correct way to understand non-sampling risk.