Which of the Following Sample Planning Factors Would Influence the Sample

question 25

Multiple Choice

Which of the following sample planning factors would influence the sample size for a substantive test of details for a specific account?

• A)Expected amount of misstatement but not the measure of tolerable misstatement.
• B)Expected amount of misstatement and the measure of tolerable misstatement.
• C)Measure of tolerable misstatement but not the expected amount of misstatement.
• D)Neither the expected amount of misstatement nor the measure of tolerable misstatement.

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Definitions:

Dividends

Payments made by a corporation to its shareholders out of its profits or reserves.

Tax-exempt Interest

Interest income that is not subject to federal income tax, such as that earned from certain municipal bonds.

Interest on a Savings Account

The amount paid by a bank or financial institution to depositors for holding money in a savings account.

Municipal Bonds

Municipal bonds are debt securities issued by states, cities, and other governmental entities to fund public projects, and typically offer tax-free interest payments to investors.