Audit Manual – Chapter 3 (2025/2026) – 35 Exam Questions & Answers on Sampling Methods, Audit Risk, Evidence Evaluation & Stratification

This document contains 35 fully verified exam questions with correct answers for Audit Manual Chapter 3, updated for 2025/2026 auditing standards. It provides an in-depth explanation of sampling concepts in auditing, including definitions, conditions for sampling, and its application in control and substantive testing. The guide outlines statistical and non-statistical sampling, detailing how sampling risk is measured or estimated, and the auditor’s role in applying professional judgment. Key coverage includes the three primary sample selection methods—systematic, random number, and haphazard—and their proper use to ensure representative testing. The material also discusses audit risk, sampling risk, and non-sampling risk, as well as evidence relevance and reliability. Additional topics include stratification to improve representativeness, handling missing or inapplicable items, projecting results to the population, and evaluating the nature and cause of deviations or misstatements. This guide is particularly valuable for auditors, audit trainees, CPA candidates, internal audit professionals, and accounting students preparing for examinations or needing a concise reference on sampling theory and application. It is equally useful for quality control reviewers and compliance officers seeking to reinforce audit methodology best practices. Keywords: sampling, statistical sampling, non-statistical sampling, audit risk, sampling risk, non-sampling risk, systematic selection, random number selection, haphazard selection, stratification, evidence relevance, evidence reliability, audit deviations, misstatements