In planning a statistical sample for a test of controls,an auditor increased the expected population deviation rate from the rates observed in prior audits because of the results of prior tests of controls and the overall control environment.The auditor most likely would then increase the planned
A) tolerable rate of deviation.
B) allowance for sampling risk.
C) risk of overreliance.
D) sample size.

Question

Quizplus · Accepted Answer

If the auditor has increased the expected population deviation rate, it implies that there is a higher risk of material misstatement. To maintain an acceptable level of detection risk, the auditor should increase the sample size to get a more representative sample and increase the likelihood of detecting errors. Therefore, the auditor is most likely to increase the planned sample size.

In Planning a Statistical Sample for a Test of Controls,an