What should auditors consider for judgmental sampling?

Judgmental sampling in auditing is a technique that involves using the auditor's professional judgment to select specific items from a population based on factors that they deem important or relevant. The key aspect to consider when employing judgmental sampling is the identification of risks, exceptions, and new factors. This means that auditors evaluate the areas of greatest risk and focus on those transactions or balances that might present the most significant issues or anomalies.

By identifying risks, auditors can concentrate their efforts on samples that are more likely to reveal material misstatements or compliance issues. This targeted approach helps optimize the audit process, making it more effective and efficient. Additionally, recognizing exceptions and adapting to new factors is vital since circumstances in the audit environment can change from one period to another, requiring adjustments in the sampling approach.

While other options may discuss elements relevant to audits, such as revenue generation or historical data, these do not encompass the proactivity and specificity needed in judgmental sampling. Auditors must prioritize risk assessment and the potential for exceptions to ensure a thorough and focused audit.