[TheNeverEndingStory]

Hey All

I am review Becker Ch5 Audit Sampling Question CPA-02583 (ref # for those that have the software) and do not understand the answer explanation and was hoping someone could help. The answer basically states that “a lower risk of incorrect acceptance results in an increase in sample size.” My understanding was the the risk of incorrect acceptance has direct relationship to the sample size not inverse. Can someone explain to me why Becker’s answer is correct? Thanks.

BEC-Passed, Reg-Passed, Aud-Passed, FAR- Nov 30, 2010 -PASSED

[Anonymous]

To put it as plainly as I know how, you have to look at it as the amount of risk the auditor is willing to take that a balance is correct. If the auditor is less willing to take a chance that the balance is correct (lower risk of incorrect acceptance), a larger sample size is needed. By taking the larger sample size the auditor keeps his risk low. That's just how I look at it.

[Author]

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