Which of the following sample planning factors would influence the sample size for a substantive test of details for a specific account?
A)Expected amount of misstatement but not the measure of tolerable misstatement.
B)Expected amount of misstatement and the measure of tolerable misstatement.
C)Measure of tolerable misstatement but not the expected amount of misstatement.
D)Neither the expected amount of misstatement nor the measure of tolerable misstatement.

Question

Quizplus · Accepted Answer

The expected amount of misstatement and the measure of tolerable misstatement both influence the sample size for a substantive test of details. The auditor needs to consider how much misstatement is acceptable (tolerable) based on the materiality of the account and then use the expected amount of misstatement to calculate the appropriate sample size. Choice A is incorrect as it only considers one factor. Choice C is incorrect as it flips the focus of the sample from the expected misstatement to the tolerable misstatement, which is not the correct approach. Choice D is incorrect as both factors are important in determining the sample size.

Which of the Following Sample Planning Factors Would Influence the Sample