Various Factors Influence the Sample Size for a Substantive Test

question 53

Multiple Choice

Various 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)Lower assessment of control risk.
• B)Greater reliance on analytical procedures.
• C)Smaller expected frequency of misstatements.
• D)Smaller measure of tolerable misstatement.

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Definitions:

T-bill

Short-term U.S. government debt obligation backed by the Treasury Department with a maturity of less than one year.

Standard Deviation

A statistic that measures the dispersion of a dataset relative to its mean, often used in finance to measure the volatility of returns.

Expected Rate

The anticipated return or yield on an investment, often based on historical data, current market conditions, and forecasts.

T-bill

Short-term government securities that mature in a year or less, offering investors a safe and liquid means of investment.