In auditing, what does "population" refer to?

In auditing, "population" refers to the entire class of transactions or account balances from which a sample is drawn for testing. This encompasses all relevant data that auditors are concerned with regarding the financial statements or internal controls being examined. Understanding the population helps auditors determine the scope of their audit and informs their sampling strategy, ensuring that the sample selected is representative of the entire group.

The proper definition allows auditors to perform effective risk assessments and draw conclusions based on the sample results, thereby ensuring that the audit results are relevant and can be generalized to the entire population. By focusing on the entirety of transactions or account balances, auditors can ensure that their testing is comprehensive and covers all potential areas of concern within the financial records.