What does non-sampling risk in auditing include?

Non-sampling risk in auditing refers to all aspects of audit risk that are not attributed to the use of sampling. This type of risk can arise from various factors, including misinterpretation of audit evidence, the auditor’s judgment or decisions made during the audit process, or failures in procedures that could occur regardless of whether the auditor used a sampling method or examined the entire population.

For instance, even if an auditor chooses an appropriate sampling technique and selects a representative sample, they may still draw incorrect conclusions based on their interpretation of the evidence obtained from that sample. Non-sampling risk emphasizes the importance of the auditor's competence, ethical considerations, and the quality of internal controls, all of which can influence the audit outcome irrespective of how the evidence is obtained.

In contrast, the other options either narrow down the scope of non-sampling risk too significantly or incorrectly categorize aspects of audit risk that are indeed related to sampling. Therefore, recognizing that non-sampling risk encompasses all audit risk that is not a result of sampling methodologies provides a broader understanding necessary for effective auditing practices.