What does the term 'population' refer to in audit sampling?

The term 'population' in audit sampling refers to the overall group of items audited. In the context of auditing, the population is defined as the complete set of data or transactions from which a sample is drawn for the purpose of testing and obtaining audit evidence.

When auditors perform sampling, they aim to make inferences about the entire population based on the results from the sample they select. This approach is particularly useful when examining large volumes of transactions or items, as it allows auditors to achieve a reasonable level of assurance without having to review every single item in the population.

The selection of the population is critical as it affects the reliability and accuracy of the audit conclusions. A well-defined population ensures that the sample drawn is representative and that the findings can be extrapolated to the larger group with confidence.