A number of factors influence the sample size for a substantive test of details of an account balance. All other factors being equal, which of the following would lead to a larger sample size?
A)Greater reliance on internal controls.
B)Greater reliance on analytical procedures.
C)Smaller expected frequency of misstatements.
D)Smaller measure of tolerable misstatements.

Question

Quizplus · Accepted Answer

A smaller measure of tolerable misstatements means that the auditor is willing to tolerate less misstatement in the account balance, which requires a larger sample size to ensure the reliability of the conclusion. In contrast, choices A and B would lead to a smaller sample size, as reliance on internal controls and analytical procedures reduces the level of substantive testing required. Choice C is irrelevant since it refers to the expected frequency of misstatements, not the sample size.

A Number of Factors Influence the Sample Size for a Substantive