Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

What factor does NOT greatly affect sample size in statistical sampling during internal controls testing?

1. Tolerable rate of deviation from controls

2. Expected population deviation rate

3. Allowable risk of assessing control risk too low

4. Population size

The correct answer is: Population size

In statistical sampling for internal controls testing, the sample size is primarily influenced by factors such as the tolerable rate of deviation from controls, the expected population deviation rate, and the allowable risk of assessing control risk too low. These factors reflect the auditor's risk tolerance and the level of confidence required in the controls being tested. The tolerable rate of deviation defines how much deviation from controls is acceptable without impacting the overall effectiveness of the control system. A lower tolerable rate would necessitate a larger sample size to maintain confidence in the test results. Similarly, the expected population deviation rate indicates the auditor’s estimation of how frequently the control is likely to fail, which also affects the sample size in that if a higher rate is anticipated, a larger sample may be needed to achieve reliable results. The allowable risk of assessing control risk too low essentially represents the risk the auditor is willing to take that they might conclude a control is effective when it is not. A higher allowable risk can lead to a smaller sample size since the auditor would be willing to accept a lower assurance level. In contrast, the population size does not have a significant impact on sample size in internal controls testing, especially when the population is relatively large. This is because statistical sampling techniques often reach a point