What is Nonsampling Risk?

Nonsampling risk includes all audit risks other than sampling risk . Or, stated differently, nonsampling risk is the probability of arriving at an incorrect conclusion, despite having selected a correct sample.

Examples of Nonsampling Risk

Examples of nonsampling risk are as follows:

• Applying inappropriate audit procedures to an audit.

• Allowing personal bias or pressure from the client to affect audit decisions, such as being overly lenient in assessing the adequacy of financial disclosures.

• Errors on how audit test results are collected. For example, an auditor might record client responses to questions incorrectly.

• The failure to detect a material misstatement over the course of an audit.

• The misinterpretation of audit test results, which can be caused by having preconceived notions about what the results should be.