The audit team is planning to examine a sample of control policies and procedures.Assume that,based on the intended degree of reliance on internal control,the audit team wishes to control the risk of overreliance to 5%.In addition,based on prior engagements,the audit team anticipates an expected deviation rate of 2%.What would be the impact of reducing the tolerable rate of deviation from 7% to 5% on the sample size?
A)Increase sample size by 181 items.
B)Decrease sample size by 181 items.
C)Increase sample size by 93 items.
D)Decrease sample size by 93 items.

Question

Quizplus · Accepted Answer

Reducing the tolerable rate of deviation from 7% to 5% would require a larger sample size to maintain the same level of confidence in the results, as the margin for error is reduced.

The Audit Team Is Planning to Examine a Sample of Control