The relationship of acceptable risk of accessing control risk too low (ARACR) to sample size is:
A) variable (sometimes larger, sometimes smaller).
B) direct (larger ARACR = larger sample).
C) inverse (larger ARACR = smaller sample).
D) nonexistent.

Question

Quizplus · Accepted Answer

The relationship between ARACR and sample size is inverse, meaning that as ARACR increases (i.e. more risk is acceptable), the required sample size decreases. This is because a higher ARACR means that the auditor is willing to accept a greater level of risk that material misstatements may not be detected, and therefore the auditor can reduce their sample size.

The Relationship of Acceptable Risk of Accessing Control Risk Too