The Audit Team Is Planning to Examine a Sample of Control

Multiple Choice

The audit team is planning to examine a sample of control policies and procedures.Assume that the audit team establishes a tolerable rate of deviation of 6% and,based on past audits,estimates the expected population deviation rate to be 2%.Which of the following is not true with respect to the impact of the risk of overreliance on sample size?

A) The risk of overreliance has an inverse impact on sample size.
B) The risk of overreliance should be assessed at higher levels if the audit team wishes to place lower levels of reliance on internal control.
C) If the audit team assesses the risk of overreliance at 10%,the resultant sample size would be 88 items.
D) If the audit team reduced the risk of overreliance from 10% to 5%,the resultant decrease in the sample size would be 39 items.