Q.The single most significant limitation of Test Checking is that:
(A) It is more expensive than checking every transaction
(B) It carries an inherent sampling risk — an error or fraud outside the selected sample will go undetected
(C) It cannot be applied to any business, regardless of size
(D) It always requires hiring additional audit staff

The core trade-off of sampling is that whatever falls outside the chosen sample is never actually examined.

Test Checking's defining limitation flows directly from what it IS: examining only a sample, not the whole population, of transactions. However carefully the sample is chosen, any error or fraud that happens to fall in the UNTESTED portion of the transactions will simply not be caught by that audit — this is the inherent sampling risk every sampling-based technique carries.

Option-by-option analysis:

• (A) Incorrect — this reverses the actual relationship; saving time and cost compared to full checking is a stated ADVANTAGE of test checking, not a limitation.
• (B) Correct — this is precisely the limitation stated in Section b: sampling risk is inherent to the technique, regardless of how well the sample is designed. …