Assume that the audit team established a tolerable rate of deviation of 5%,an expected population deviation rate of 1%,and desired to control the risk of overreliance to 5%.What is the appropriate sample size in this situation?
A)77 items.
B)93 items.
C)132 items.
D)124 items.

Question

Quizplus · Accepted Answer

The appropriate sample size can be calculated using the formula:
Sample size = ((Z-score)^2 * P*(1-P))/d^2
where Z-score = 1.65 (corresponding to a 95% confidence level)
P = expected population deviation rate = 1%
d = tolerable rate of deviation = 5%

Plugging in the values,
Sample size = ((1.65)^2 * 0.01 * 0.99)/(0.05)^2
Sample size = 92.45 or 93 (rounded up)

Therefore, the appropriate sample size is 93 items which is Option B.

Assume That the Audit Team Established a Tolerable Rate of Deviation