In determining the number of documents to select for a test to obtain assurance that all sales returns have been properly authorized,an auditor should consider the tolerable rate of deviation from the control activity.The auditor should also consider: 1.Likely rate of deviations
2)Allowable risk of underreliance.
A)1 only.
B)2 only.
C)Both 1 and 2.
D)Either 1 or 2.

Question

Quizplus · Accepted Answer

The auditor should consider the likely rate of deviations to determine the sample size needed to test the control activity effectively. The allowable risk of underreliance is not directly related to determining the sample size for testing control activities.

In Determining the Number of Documents to Select for a Test