For Each of the Following Situations, Indicate Whether There Would

question 46

Essay

For each of the following situations, indicate whether there would be an increase, decrease, or no effect on sample size:
1. The auditor has assessed control risk as low.
2. The auditor has discovered that the number of sampling units in the population has increased from 2380 to 5640.
3. The auditor has used stratification.
4. The auditor has increased the total error that they are willing to accept.
5..The auditor has assessed the risk of material misstatement as high.
6. The auditor now expects to find more errors than originally anticipated.
7. The risk that the auditor will conclude that a material error does not exist when in fact it does has increased.

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Definitions:

Anticipatory Repudiation

An assertion or action by a party indicating they will not perform their future obligations under a contract, allowing the other party to treat the contract as breached.

Objective Standard

A guideline used in law that is based on what a reasonable person would believe or do under the circumstances, rather than on the subjective intentions of the parties involved.

Illusory Contract

An agreement that lacks a binding obligation from one or more parties, typically because terms are too vague or one party has the option not to perform their promise.

Subjective Standard

A legal standard based on an individual's personal feelings, tastes, or opinions, often used in determining the reasonableness of an action in legal cases.