As the Auditor,you Are Assessing the Proper Sample Size to Use

question 28

Multiple Choice

As the auditor,you are assessing the proper sample size to use in testing controls.When using attributes sampling,which of the following is most correct?

• A)A 10% change in population size will have the least effect on sample size.
• B)A 10% change in the tolerable deviation rate will have the least effect on sample size.
• C)A 10% change in the expected deviation rate will have the least effect on sample size.
• D)A 10% change in the tolerable will have the least effect on sample size.

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Definitions:

Commercial Paper

An unsecured, short-term debt instrument issued by corporations.

Treasury Bills

Short-term government securities issued at a discount from their face value, maturing in a year or less.

Low Default Risk

A classification for bonds or other forms of debt that are deemed to have a minimal chance of the issuer failing to make the required payments.

Money Market

The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities are traded, intended for short-term borrowing and lending.