Carson,CPA,judged That His Test of Controls of the Company's 10,000

question 102

Multiple Choice

Carson,CPA,judged that his test of controls of the company's 10,000 sales transactions should be based on a risk of overreliance of 10%,a tolerable rate of deviation of 8%,and an expected population deviation rate of 3.75%.Using the AICPA Sample Size tables,which of the following modifications would not affect Carson's sample size?

• A)Decrease in the risk of overreliance from 10% to 5%.
• B)Increase in the tolerable rate of deviation from 8% to 10%.
• C)Increase in the expected population deviation rate from 3.75% to 4%.
• D)Decrease in the tolerable rate of deviation from 8% to 7%.

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Definitions:

Useful Life

The period of time over which an asset is expected to be useful in the operations of a business.

Traceable Fixed Expense

A fixed expense that can be directly linked to a specific department, project, or segment of a business.

Net Operating Income

The amount of profit realized from a company's operations after subtracting operating expenses but before interest and taxes.

Price Hike

An increase in the selling price of goods or services, often due to higher costs or improved demand.