Question at position 15 As you need to be more confident in your sample, the sample size should:Stays the same.Increase or decrease based on the judgement of the internal audit function.Decrease. Increase.

Question

BlackTom AI · Accepted Answer

In this question, we’re dealing with how sample size should be adjusted as you become more confident in your sample.
Option 1: 'Stays the same.' If you already have high confidence, you might think no change is needed, but typically increasing confidence warrants revisiting the sample size to ensure precision, so this option isn’t aligned with standard sampling practice.
Option 2: 'Increase or decrease based on the judgement of the internal audit function.' While professional judgment is important, relying on judgment alone without a predefined criterion can be inconsistent. Good sampling guidance usually specifies how sample size should change with confidence level or desired precision, rather than ad hoc adjustments.
Option 3: 'Decrease.' Dropping the sample size as confidence grows might reduce precision or fail to meet audit objectives. Generally, higher confidence requires careful maintenance or even increased sample size to sustain representativeness, not a reduction.
Option 4: 'Increase.' When you aim for greater confidence in the findings, the standard approach is to increase the sample size (or ensure the sample provides the required precision). This aligns with statistical principles that larger samples improve estimate accuracy and reduce margin of error as confidence requirements rise.
Overall, the reasoning supports enlarging the sample size to achieve higher confidence, making option 4 the correct choice.

Question at position 15 As you need to be more confident in your sample, the sample size should:Stays the same.Increase or decrease based on the judgement of the internal audit function.Decrease. Increase.Single choice

Similar Questions

You are concerned that your audit client has misclassified operating expenses as asset acquisitions, similar to the WorldCom fraud. What population will you use to select a sample to detect the potential misclassifications?

You are planning a substantive test for purchase transactions to determine if all purchase invoices from suppliers represent items that were actually received by the Receiving Department. What is the appropriate population to select your sample for this test?

You are planning a substantive test for purchase transactions to determine if all inventory items received are recorded on the books. What is the appropriate population to select your sample to begin this test?

You are planning a substantive test of details to determine if all recorded sales revenue transactions are supported by a sales contract with the customer and a shipping document. What is the appropriate population to select your sample for this test?

The auditor uses monetary-unit sampling (MUS) to conduct substantive tests for an account. The desired confidence level in selecting the sample is 95%, the upper misstatement limit (UML) is $11,200, and the auditor’s tolerable misstatement is $14,000. Which of the following is a true statement?

As a result of tests of controls, an auditor incorrectly assessed control risk as high and inappropriately followed the substantive strategy for the financial statement audit. This assessment occurred because

One way to test all items in a population of occurrences for a particular control activity is to use testing, which is now possible due to the emergence of ADA.

ADA has a major impact on transaction level control testing by enabling the auditor to more easily Blank ______.

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler