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 10%.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 is 77 items. This is because the tolerable rate of deviation is 5%, the expected population deviation rate is 1%, and the desired risk of overreliance is 10%. The formula for calculating the sample size is:n = (Z^2 * p * q) / e^2where:n is the sample sizeZ is the z-score for the desired risk of overreliancep is the expected population deviation rateq is the complement of p (1 - p)e is the tolerable rate of deviationPlugging in the values given in the question, we get:n = (1.645^2 * 0.01 * 0.99) / 0.05^2n = 77.01Therefore, the appropriate sample size is 77 items.

Assume That the Audit Team Established a Tolerable Rate of Deviation