Accounting Multiple Choice Question – 7 June 2026

Which ONE of the following statements are correct regarding factors which influence sample sizes for tests of controls?

Select ONE answer:

1. An increase in the number of sampling units within the population will increase the sample size
2. A decrease in the tolerable misstatement will decrease the sample size
3. An increase in the extent to which the risk of material misstatement is reduced by the operating effectiveness of controls will NOT decrease the sample size
4. A decrease in the expected misstatement will decrease the sample size

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 – ISA 530 states factors influencing sample sizes for tests of controls include: An increase in the number of sampling units will have a negligible effect on the sample + A decrease in the tolerable misstatement will decrease sample size.

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