Certified Government Auditing Professional (CGAP) Practice Exam 2026 – The All-in-One Guide to Exam Success

The assessed level of risk is a critical factor that determines the extent of sampling during an audit. When an auditor evaluates the inherent and control risks associated with specific areas of an organization's operations, they are able to gauge the likelihood of material misstatements.

Higher assessed risks generally lead to a greater sampling size because the auditor must gather sufficient evidence to mitigate those risks effectively. This is essential to provide a reasonable basis for the auditor's opinion on the financial statements. Conversely, if the assessed level of risk is low, the auditor may decide to perform less extensive sampling, as the risk of material misstatement is reduced.

The type of audit, the auditor's judgment, and the size of the organization can influence sampling decisions to some extent but are not as central to the determination of sample size as the assessed level of risk. The focus on risk assessment aligns with the principle that auditors must adapt their procedures to the specifics of the entity being audited and the risks that are present.