ExpertHard1 markMultiple Choice
CPA · Question 29 · Area 3: Performing Procedures
An auditor is calculating the sample size for a test of controls using attribute sampling. Which of the following changes would result in a DECREASE in the required sample size?
An auditor is calculating the sample size for a test of controls using attribute sampling. Which of the following changes would result in a DECREASE in the required sample size?
Answer options:
A.
An increase in the expected population deviation rate.
B.
A decrease in the acceptable risk of assessing control risk too low.
C.
An increase in the tolerable deviation rate.
D.
An increase in the population size (for a large population).
How to approach this question
Understand the variables: Higher Confidence (Lower Risk) = More Sample. Higher Expected Error = More Sample. Higher Tolerable Error = Less Sample.
Full Answer
C.An increase in the tolerable deviation rate.✓ Correct
The tolerable deviation rate is inversely related to sample size. If the auditor is willing to accept a higher rate of deviation, a smaller sample size is sufficient to provide the required assurance.
Common mistakes
Confusing Expected Rate (Direct relationship) with Tolerable Rate (Inverse relationship).
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