Sampling Risk (2)

Question 1

What is required confidence level effect on sample size? (auditor sample results)

Answer 1

Describes how confident the auditor needs to be that the sample results are representative of the population as a whole

Question 2

What is required confidence level effect on sample size? (degree of confidence)

Answer 2

Greater of confidence the auditor requires, the larger sample size needs to be

Question 3

What is expected error effect on sample size? (level of errors)

Answer 3

This relates to the level of errors the auditor expects to find in the population

Question 4

What is expected error effect on sample size? (sample size reasonable estimate)

Answer 4

If level of expected error is high then the sample size needs to be alrger to make a reasonable estimate of actual amount of the error in the population

Question 5

What is tolerable error/misstatement on effect on sample size? (Level of error)

Answer 5

Relates to the level of error or misstatement that the auditor can accept in the population before he is concerned that there is a material misstatement

Question 6

What is tolerable error/misstatement on effect on sample size? (lower tolerable error)

Answer 6

The lower the level of tolerable errors that can be accepted, the larger the sample size needs to be