Various factors influence the sample size for a substantive test of details of an account balance.All other factors being equal,which of the following would lead to a larger sample size?
A)Lower assessment of control risk.
B)Greater reliance on analytical procedures.
C)Smaller expected frequency of misstatements.
D)Smaller measure of tolerable misstatement.

Question

Quizplus · Accepted Answer

A smaller measure of tolerable misstatement means the auditor can only tolerate a smaller amount of misstatement. This reduces the auditor's acceptable risk of incorrect acceptance and increases the sample size needed to give a higher level of assurance.

Various Factors Influence the Sample Size for a Substantive Test