Auditors may decide to decrease the acceptable level of risk when:
a.Initial sample results do not support the planned level of control risk.
b.Many differences (audit value minus recorded value) are expected.
c.Increased reliability from the sample is desired.
d.The cost and effort of selecting additional sample items is low.
Answer:D
Choice "D" is correct. Decreasing the acceptable level of risk will result in a larger sample size, which the auditor might not want to do unless the cost and effort of selecting additional sample items is low.
Choice "c" is incorrect. Decreasing the acceptable level of risk doesn't increase the reliability of a given sample. It does, however, result in selection of a larger sample, which in turn makes it less likely that the auditor will make an incorrect decision.
Choice "b" is incorrect. The auditor's acceptable level of risk is not affected by the extent to which differences are expected.
Choice "a" is incorrect. The auditor should determine the acceptable level of risk prior to selecting and *uating the sample.
