In performing a test of a control last year the auditors specified a tolerable deviation rate of X percent.This year the auditors have specified a tolerable rate of less than X percent.Assuming that all other factors remain the same,which of the following is true regarding the relationship between this year's sample size compared to last year's sample size?
A)This year's sample is larger than last year's sample.
B)This year's sample is smaller than last year's sample.
C)This year's sample is equal to last year's sample.
D)This year's sample is indeterminate in relation to last year's sample.

Question

Quizplus · Accepted Answer

When the auditors specify a lower tolerable deviation rate this year, it indicates that they expect a higher level of assurance from the controls. Hence, the sample size needs to be larger to achieve that higher level of assurance. Therefore, this year's sample size is expected to be larger than last year's sample size.

In Performing a Test of a Control Last Year the Auditors