Questions -
Q1. Conceptually, confidence level (reliability), which is 1 - Acceptable Risk of Overreliance (ARO), and audit risk in the audit risk model are conceptually very similar. In addition, Tolerable Exception Rate (TER) and materiality in the risk model are conceptually very similar. Explain each of these statements and discuss why the two comparisons are similar.
Q2. Describe the conditions under which an auditor might choose to select a sampling technique, either statistical or non-statistical, over a non-sampling technique and vice versa. That is, when would an auditor choose to sample and when would they chose either not to test or to test 100% of the population?
Q3. How does non-statistical sampling differ from statistical sampling and when might an auditor choose one over the other?