Audit sampling is an investigative tool in which less than 100% of the total items within the population of items are selected to be audited. It is an auditing technique that provides supporting evidence that allows audi

Yes, the statement is correct because, when auditing financial statements, it is not feasible to audit and check every single item within the financial statements. It will be very costly and will take a lot of resources and time to do so. Audit sampling enables auditors to make conclusions and express fair opinions based on predetermined objectives without having to check all of the items within financial statements. The auditors will only verify selected items, and through sampling, can infer their opinion on the entire population of items. Purpose of Audit Sampling: No matter what kind of audit is being performed-internal, external, or government- audit sampling needs to be used so that auditors can complete their audits without wasting resources in checking every single item. The objectives of audit sampling are as follows: Gather enough evidence to conclude an audit opinion Reduce the number of resources used Provide the basis for auditors to issue a conclusive audit opinion Detect any errors or fraud that can occur Prove that auditors have completed their audit fully in accordance with auditing standards Used as a tool for investigating Audit Sampling Importance. There are two forms of sampling: Statistical audit sampling Statistical audit sampling involves a sampling approach where the auditor utilizes statistical methods such as random sampling to select items to be verified. Random sampling is used when there are many items or transactions on record. Consider a company with more than 100 inventory transactions on its records. Using statistical sampling is recommended due to the high number of transactions. For example, with statistical sampling, ten items are selected from the total population randomly. Every single item within the 100 has an equal probability of being selected and tested for accuracy as a result. Again, it benefits auditors since they can still make an audit opinion but do not have to check all 100 transactions. Non-statistical audit sampling In contrast to statistical audit sampling, non-statistical audit sampling items are not chosen randomly. Instead, they are chosen based on the auditor's judgment, and the result of the testing from the selections is not used to infer the conclusion for the entire population. In the example earlier, ten inventory transactions can be used to infer the opinion on all 100 transactions. In non-statistical audit sampling, the auditors may choose to select items based on criteria such as: The value of items (e.g., items greater than ₹10 lacs) Items with specific information (e.g., items related to a certain company)