When Conducting Substantive Testing, Which of the Following Is Not

question 10

Multiple Choice

When conducting substantive testing, which of the following is not a factor that influences the sample size?

• A) an increase in the tolerable rate of deviation
• B) an increase in the auditor's assessment of the risk of material misstatement
• C) stratification of the population when appropriate
• D) an increase in tolerable misstatement

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Definitions:

Future Net Income

An estimation of a company's future earnings after all expenses and taxes have been subtracted from revenue.

Project

A project is a temporary endeavor designed to produce a unique product, service, or result with a defined beginning and end, often constrained by funding or deliverables.

Erosion Costs

Costs that occur when a new project leads to a decline in revenues or increase in expenses of existing products or services.

Salvage Value

The calculated remaining value of an asset after it has served its anticipated lifetime.