In the audit of account balances,the sample size will tend to be smaller when the ________.
A)risk of incorrect acceptance is lower
B)risk of incorrect rejection is lower
C)tolerable misstatement is smaller
D)population variability is smaller

Question

Quizplus · Accepted Answer

When population variability is smaller, it means there is less variation within the population and a smaller sample size can be used without affecting the precision of the audit results. Therefore, the sample size will tend to be smaller. A, B, and C are incorrect because a lower risk of incorrect acceptance, a lower risk of incorrect rejection, and a smaller tolerable misstatement all indicate a greater risk of misstatement and would require a larger sample size for more accurate testing.

In the Audit of Account Balances,the Sample Size Will Tend