Sanjeev, an articled clerk in an audit firm, is part of an engagement team conducting audit of a company for year 2023-24. It is a small company…

Audit Sampling refers to the application of audit procedures to less than 100% of items within a population relevant under the audit such that all sampling units (i.e. all the items in the population) have an equal chance of selection. In the given situation, senior team member is not selecting items for testing by means of audit sampling. He is only selecting specific items from a population . In accordance with SA 500, one of the means available to auditor for selecting items for testing is “by selecting specific items." Specific items selected may include: - High value or key items: The auditor may decide to select specific items within a population because they are of high value, or exhibit some other characteristic, for example, items that are suspicious, unusual, particularly risk-prone or have a history of error. All items over a certain amount: The auditor may decide to examine items whose recorded values exceed a certain amount so as to verify a large proportion of the total amount of a class of transactions or account balance. Items to obtain information: The auditor may examine items to obtain information about matters such as the nature of the entity or the nature of transactions. Therefore, Sanjeev's understanding is not proper. The above approach for selecting items for testing is subject to non-sampling risk. Non-sampling risk is the risk that auditor may reach an erroneous conclusion for any reason not related to sampling risk. Like, erroneous conclusion may be reached due to some inappropriate audit procedure.