An auditor is determining the sample size for a test of controls. Which of the following factors has an INVERSE relationship with sample size?

Answer options:

Tolerable deviation rate.

Expected population deviation rate.

Desired confidence level.

Population size (for large populations).

How to approach this question

Sampling Relationships: Tolerable Rate is Inverse (Loose rules = Less work). Expected Rate/Confidence are Direct (More errors/More certainty = More work).

Full Answer

A.Tolerable deviation rate.✓ Correct

The tolerable deviation rate is inversely related to sample size. If the auditor is willing to accept a higher rate of error (less precision), a smaller sample is required.

Common mistakes

Confusing Tolerable (Inverse) with Expected (Direct).

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