While selecting a sample of sales invoices for a test of internal controls,the auditor was unable to locate one invoice and classified this invoice as non-deviation.This is an example of
A) sampling risk.
B) incorrect acceptance.
C) nonsampling risk.
D) deviation risk.

Question

Quizplus · Accepted Answer

This situation does not involve sampling risk (A) because the auditor was not selecting a sample at random. It also does not involve incorrect acceptance (B) because the missing invoice was classified as a non-deviation, meaning it did not affect the overall results of the test. It also does not involve deviation risk (D) because the missing invoice was classified as a non-deviation. Therefore, the situation is an example of nonsampling risk, which includes the risks of incorrect or incomplete data or misinterpretation of evidence.

While Selecting a Sample of Sales Invoices for a Test