Which of the following statements is correct about the sample size in statistical sampling when testing internal controls?
A)The auditor should consider the tolerable rate of deviation from the controls being tested in determining sample size.
B)As the likely rate of deviation decreases,the auditor should increase the planned sample size.
C)The allowable risk of assessing control risk too low has no effect on the planned sample size.
D)Of all the factors to be considered,the population size has the greatest effect on the sample size.

Question

Quizplus · Accepted Answer

The auditor should consider the tolerable rate of deviation from the controls being tested in determining sample size. This is because if the auditor needs to have a lower rate of deviation, they will need to increase the sample size to achieve the desired level of confidence. The other statements are incorrect. As the likely rate of deviation decreases, the auditor may decrease the planned sample size as less testing may be required. The allowable risk of assessing control risk too low should be considered as it affects the planned sample size. Population size is another factor that may affect the sample size but not the most significant one.

Which of the Following Statements Is Correct About the Sample