## Sampling Risk
The risk that the auditor's conclusion based on a sample differs from the conclusion that would be reached if the entire population were tested.
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## Two Types of Sampling Risk
| Test | Unfavourable Error (Primary Concern) | Favourable Error (Efficiency Risk) |
|---|---|---|
| Test of Controls (TOC) | Controls appear more effective than they actually are | Controls appear less effective than they actually are |
| Test of Details (TOD) | Material misstatement appears not to exist when it actually does | Material misstatement appears to exist when it actually doesn't |
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## Why the Unfavourable Error is More Serious
- Affects audit effectiveness — auditor is misled into a wrong conclusion
- More likely to result in an inappropriate audit opinion
The favourable error only affects audit efficiency — it leads to additional (unnecessary) work but the auditor ultimately corrects the initial conclusion. No wrong opinion results.
> Key principle: Sampling risk can be reduced to an acceptably low level (by increasing sample size or improving selection method) but can never be eliminated entirely.