The Audit Team Is Planning to Examine a Sample of Control

question 35

Multiple Choice

The audit team is planning to examine a sample of control policies and procedures.Assume that,based on the intended degree of reliance on internal control,the audit team wishes to control the risk of overreliance to 5%.In addition,based on prior engagements,the audit team anticipates an expected deviation rate of 2%.What would be the impact of reducing the tolerable rate of deviation from 7% to 5% on the sample size?

• A)Increase sample size by 181 items.
• B)Decrease sample size by 181 items.
• C)Increase sample size by 93 items.
• D)Decrease sample size by 93 items.

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Definitions:

Shoshone Indian

A member of a Native American tribe originally living in the western United States, known for their nomadic lifestyle.

Pacific Ocean

The largest and deepest of the world's oceanic divisions, extending from the Arctic in the north to the Southern Ocean in the south.

Spanish Settlement

A community or colony established by Spaniards in foreign territories during their period of exploration and colonization.

Jamestown

The first permanent English settlement in North America, established in Virginia in 1607.