The acceptable risk of incorrect rejection is important only when there is a ________ cost to increasing the sample size.
A) high
B) low
C) moderate
D) marginal

Question

Quizplus · Accepted Answer

The acceptable risk of incorrect rejection (Type I error) becomes particularly important when there is a high cost associated with increasing the sample size. This is because, as the cost of adding more samples to the audit or study increases, auditors or researchers must carefully consider the risk of rejecting a true hypothesis (e.g., concluding a control is ineffective when it is actually effective) versus the cost implications of expanding the sample size for more conclusive results.

The Acceptable Risk of Incorrect Rejection Is Important Only When