A senior IT auditor is performing an audit of inventory valuation. The auditor misinterprets the sampling results. Which of the following best describes this situation?

The correct answer is C. Nonsampling risk. Nonsampling risk refers to the risk that the auditor reaches an incorrect conclusion due to errors not related to the sample itself but to other factors such as misinterpretation of data, incorrect application of procedures, or human error.

Performing the Engagement

Question

Options

ASampling risk.
BControl risk.
CNonsampling risk.
DResidual risk.

How the community answered

(45 responses)

A
2% (1)
B
4% (2)
C
84% (38)
D
9% (4)

Explanation

Nonsampling risk refers to the risk that the auditor reaches an incorrect conclusion due to errors not related to the sample itself but to other factors such as misinterpretation of data, incorrect application of procedures, or human error.

Topics

#nonsampling risk#sampling risk#inventory valuation#audit risk

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