What does audit sampling involve?

Audit sampling involves selecting and evaluating a subset of items from a larger population to draw conclusions about the entire population. This method is often employed due to the impracticality of reviewing 100% of financial transactions, especially in large datasets, making it efficient and cost-effective.

Sampling less than complete datasets allows auditors to assess trends, detect errors, and verify the integrity of financial data without examining every transaction. This approach is critical in maintaining the balance between thoroughness and efficiency during the audit process. Moreover, it provides a basis for forming opinions about the overall financial statements while minimizing the time and resources spent.

In the context provided, this choice accurately reflects the practice of audit sampling, which is fundamental in ensuring that an audit can be performed effectively while still providing a reasonable assurance that the financial statements are free of material misstatements.