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Sampling risk: Say there are 10,000 invoices and you sample 30. They could all be perfectly approved. However, there could be lots in the 10,000 which are not properly handled, but you didn’t find any because of ‘bad luck’ in sampling. Increasing the sample size will reduce the chance of that.
Non-sampling risk: Say I was auditing a bank’s transaction in futures and options. I could look at 100% of these but be none the wiser because I don’t inderstand them or what I should be looking for. To reduce this risk you need a more experienced, better trained and better supervised auditor.
HTH
Absolutely perfect. Just like the definition of sampling risk put it. The risk that the results of a sample are different from entire population if every single member of the population was to be tested. In other words the likelihood of a sample not being represenatative of the total population.
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