During the final planning of the accounts receivable program a CPA specified a tolerable misstatement of $30,000,instead of the $20,000 contained in the preliminary audit program.What would be the impact of this change?
A)A decrease in population standard deviation.
B)An increase in sample standard deviation.
C)An increase in required sample size.
D)A decrease in the required sample size.

Question

Quizplus · Accepted Answer

Increasing the tolerable misstatement will decrease the required sample size, as there is a larger acceptable range for errors, so the auditor needs to test fewer items to achieve the specified level of precision.

During the Final Planning of the Accounts Receivable Program a CPA