Sample Size Quiz

The auditor assesses the risk of material misstatement for revenue recognition as high due to complex multiple-element arrangements.
What should the auditor do regarding sample size?

• Increase

• Decrease

• Negligible Change

Control risk for the purchasing cycle is assessed as lower than expected because the client implemented strong automated approval controls.
What should the auditor do regarding sample size?

• Increase

• Decrease

• Negligible Change

The auditor finds that population variability in inventory valuation is very low, and most items are homogeneous in nature.
What should the auditor do regarding sample size?

• Increase

• Decrease

• Negligible Change

The auditor determines that detection risk can be higher.
What should the auditor do regarding sample size?

• Increase

• Decrease

• Negligible Change

Tolerable misstatement is reduced significantly for accounts receivable due to management’s tight materiality thresholds.
What should the auditor do regarding sample size?

• Increase

• Decrease

• Negligible Change

The auditor plans to rely on substantive analytical procedures instead of detailed tests for payroll expenses.
What should the auditor do regarding sample size for detailed testing?

• Increase

• Decrease

• Negligible Change

The population size of petty cash transactions is much larger than expected, but each transaction is immaterial.
What should the auditor do regarding sample size?

• Increase

• Decrease

• Negligible Change

An auditor notices significant inconsistencies in prior year audit findings, increasing the expectation of misstatements in the current year.
What should the auditor do regarding sample size?

• Increase

• Decrease

• Negligible Change

The assessed inherent risk for cash transactions is low, and controls are operating effectively, confirmed by tests.
What should the auditor do regarding sample size?

• Increase

• Decrease

• Negligible Change

Population size remains unchanged, and no change occurs in risk assessment compared to prior audits.
What should the auditor do regarding sample size?

• Increase

• Decrease

• Negligible Change