AP$10\mathrm{.}2($LO $2)$Uncertainties in audit sampling One of the generally accepted auditing standards states that sufficient competent evidential matter is to be obtained through inspection, observation, inquiries, and confirmation to afford a reasonable basis for an opinion regarding the financial statements under examination. Some degree of uncertainty is implicit in the concept of $$a reasonable basis for an opinion,$$ because the concept of sampling is well established in auditing practice.

Required

a Explain the auditor$$s justification for accepting the uncertainties that are inherent in the sampling process.

b$,$Discuss the uncertainties that collectively embody the concept of audit risk.

c$,$Discuss the nature of sampling risk and nonsampling risk. Further discuss the effect of sampling risk on the conduct of substantive procedures.

$($AICPA adapted