If all other factors specified in an attributes sampling plan remain constant,changing the specified tolerable rate from 8% to 6%,and changing the specified risk of assessing control risk too low from 7% to 3% would cause the required sample size to:
A)Increase.
B)Remain the same.
C)Decrease.
D)Change by 4%.

Question

Quizplus · Accepted Answer

When the tolerable rate decreases from 8% to 6%, it means the auditor is willing to accept a lower level of errors, which requires a larger sample size to be more certain of the audit conclusion. Similarly, decreasing the risk of assessing control risk too low from 7% to 3% means the auditor wants to be more certain that the controls are not effective when they might actually be (i.e., being more conservative), which also requires a larger sample size to reduce this risk. Both changes lead to an increase in the required sample size.

If All Other Factors Specified in an Attributes Sampling Plan