Sampling risk is actually occurs when the auditor applies the procedures to the sample to judge the entire population. Sampling risk is the risk that the auditors opinion would have been different if the procedures were applied to the entire population of the data.
Auditors when wanted to express any opinion, need a sort of homework in the shape of the audit evidences. Applying audit procedures to an entire population is practically not possible because it is a time consuming process and the auditor has limited resources and time. He therefore cannot apply the procedures for the judgment to the entire population due to limited time and resources. For getting the evidences, he applies the procedure on the sample which is the small part of the population for forming an opinion. There is always a chance that the result which is obtained by this procedure applied on the sample would be erroneous. This is known as the sampling risk.
The effectiveness and the efficiency lie on the auditor who can reduce the sampling risk by picking up sample that is truly representative of the p0pulation. Carefully selected sample will decrease the rate of sampling risk. Increase in sample will reduce the sampling risk. But increase in the sample size will affect the overall efficiency of the audit. Here auditor has to play a serious role to allocate the reasonable sample for applying audit procedure to reduce the sampling risk.