Increases in the tolerable misstatement result in a decreased sample size when using mean-per-unit estimation.

Name: Increases in the tolerable misstatement result in a decreased sample size when using mean-per-unit estimation.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This statement is true. As the tolerable misstatement increases, the auditor can accept a greater level of error in the sample results. Therefore, a smaller sample size can be used to achieve the same level of assurance, resulting in decreased sample size.

Increases in the Tolerable Misstatement Result in a Decreased Sample