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In order to express an opinion on the fairness of the presentation of the financial statements, an auditor collects evidence from a variety of sources. Much of this evidence is in the form of sample results that must be evaluated as to the level of sampling risk present (AICPA 1981, sec. 26). Auditors often select and evaluate samples judgmentally rather than on the basis of a statistical method.' The assessment of risk, however, is a cognitively difficult task (Huber 1974, p. 434), and often the results may be systematically biased (Tversky and Kahneman 1974). It seems that there is a general problem of underutilizing or ignoring normatively
Stephen Butler (Tue,) studied this question.