The Multiple Choice Questions Blog

When determining a sample size for tests of controls, an auditor should consider several factors.

For the factor below, select whether it would cause the same size to increase, decrease, have no impact or have only a negligible effect.

• A decrease in the auditor’s required confidence level

Select ONE answer:

1. Has only a negligible effect
2. Increase
3. Decrease
4. Have no impact

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – A decrease in the auditor’s required confidence level will lead to a decrease in sample size
4. Not correct

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When determining a sample size for tests of controls, an auditor should consider several factors.

For the factor below, select whether it would cause the same size to increase, decrease, have no impact or to have only a negligible effect.

• An increase in the number of invoices in the population

Select ONE answer:

1. Decrease
2. Has only a negligible effect
3. Increase
4. Have no impact

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – An increase in the population will have a negligible effect on sample size as it is not a factor that determines the sample size.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

When determining a sample size for tests of controls, an auditor should consider several factors.

For the factor below, select whether it would cause the same size to increase, decrease, have no impact or to have only a negligible effect.

• An increase in tolerable misstatement

Select ONE answer:

1. Decrease
2. Have only a negligible effect
3. Increase
4. Has no impact

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – An increase in tolerable misstatement will cause a decrease in sample size, as an increase in the amount of ‘acceptable misstatements’ (or audit risk acceptable) will reduce the extent of the work necessary to be performed (as there is a corresponding acceptable increase in detection risk).
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

When determining a sample size for tests of details, an auditor should consider several factors.

For the factor below, select whether it would cause the sample size to increase, to decrease, have a negligible effect, or it depends.

• The population has been stratified.

Select ONE answer:

1. Has a negligible effect
2. Increase
3. It depends
4. Decrease

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – Stratifying the population decreases the sample size (as testing is more efficient).

This work is licensed under a Creative Commons Attribution 4.0 International License.

When determining a sample size for tests of details, an auditor should consider several factors.

For the factor below, select whether it would cause the sample size to increase, to decrease, have a negligible effect, or it depends.

• The assessed risk of a material misstatement in respect of a balance has been reappraised and has increased.

Select ONE answer:

1. Decrease
2. Has a negligible effect
3. Increase
4. It depends

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – When the assessed risk of material misstatement for a balance is increased, the sample size increases (ie, more work is needed for higher risk balances).
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.