When testing controls, a decrease in the sample size will occur when there is
A) an increase in the tolerable rate of deviation.
B) a decrease in the tolerable rate of deviation.
C) an increase in the extent to which the auditor's risk assessment takes into account relevant controls.
D) an increase in the number of sampling units in the population.

Question

Quizplus · Accepted Answer

A decrease in the sample size is directly proportional to an increase in the tolerable rate of deviation. This means that the auditor is willing to accept a higher risk level for deviations or errors in the controls, so a smaller sample is needed to test for them.

When Testing Controls, a Decrease in the Sample Size Will