[goforCPA]

Hi all….I am taking the exam on 11/30 and just finished the audit sampling section with Becker and am really confused. I have been trying to connect the AR=IR*CR*DR to the sampling risk and specifically dealing with the relationships with sample size but am not successful. Is there a relationship between the reliance on internal controls and selection of sample size?

October 2011-May 2013. Did not loose any credit!!
AUD - 73, 79
REG - 86
FAR - 72, 83
BEC - 80, last one, DONE!!

[Anonymous]

Yes, there is a relationship b/n reliance on internal control and sample size. If you have no reliance on internal controls, you need to test more (higher # of samples). If you do have control reliance, you can test less (lower # of samples).

[Anonymous]

3 factors go into the sample size for a test of controls

1) Estimated error rate for the population- If the auditor expects more error, the sample size needs to be larger.

2) Limit for highest amount of error that the auditor could tolerate and still feel that the control is effective- If the auditor can tolerate more error, the sample size can be smaller.

3) allowable level of risk that the sample will be different than the population- If the auditor needs to be more confident that the sample represents the population, the sample size will go up.

The most important part of sampling for the exam is “when does the sample size need to increase” and “when can the auditor get away with a smaller sample size.” If you follow the above, you will always know.

Cheers,

Darius

CPAexamTutoring

[twest]

I didn't ask the question, but thanks CPAexam Tutoring! I was having a very hard time with this!

FAR - 63, 79
AUD - 83!
REG - 37, 79
BEC - 70, 79

[Author]

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