Sampling risk

Abstract: A sample is a subset of a population and we survey the units from the sample with the aim to learn about the entire population. However, the sampling theory was basically developed for probability sampling, where all units in the population have known and positive probabilities of inclusion. This definition implicitly involves randomization, which is a process resembling lottery drawing, where the units are selected according to their inclusion probabilities. In probability sampling the randomized selection is used instead of arbitrary or purposive sample selection of the researcher, or, instead of various self-selection processes run by respondents. Within this context, the notion of non-probability sampling denotes the absence of probability sampling mechanism.

Abstract: In order to express an opinion on the fairness of the presentation of the financial statements, an auditor collects evidence from a variety of sources. Much of this evidence is in the form of sample results that must be evaluated as to the level of sampling risk present (AICPA [1981, sec. 26]). Auditors often select and evaluate samples judgmentally rather than on the basis of a statistical method.' The assessment of risk, however, is a cognitively difficult task (Huber [1974, p. 434]), and often the results may be systematically biased (Tversky and Kahneman [1974]). It seems that there is a general problem of underutilizing or ignoring normatively