QUESTION 2 (20 Marks) A trainee accountant was using a statistical sampling plan to determine whether the internal controls over the authorisation of journal entries were operating throughout the year. The client is a large national retailer of consumables and there are thousands of journal entries passed during the year. A hard copy, numerically sequenced journal entry authority (JEA) is compiled which details the journal entry and which must be authorised by one of three accountants in the accounting department before being processed on the system. As journal entries come from a number of sources there are numerous number sequences. The trainee used the audit software to temporary re-sequence the JEAs into one sequence so that a random sample could be drawn. Having done this, he performed the sampling exercise and concluded that the number of unauthorised journal entries was well within the tolerable rate of deviation. Subsequently, another trainee working on bad debt write offs found a number of unauthorized journal entries. On further investigation it was established that the trainee who had conducted the statistical sample had not confirmed that all the sequences of JEAs had been included in the temporary re-sequencing of JEAS. 2.1. Explain whether the above is an example of sampling risk or non-sampling risk. (4 marks) 2.2. Discuss whether the trainee's conclusion can still be accepted on the basis that his sample results were "well within the tolerable deviation rate. 2.3. Provide the advantages and disadvantages of statistical sampling. (6 marks) (10 marks)