How will the sample size for the variables sampling plan change if the tolerable misstatement is changed to 2500?

Parameters for Test of Controls

Risk of assessing control risk too low = 5%

Tolerable deviation rate = 6%

Expected deviation rate = 2%

Allowance for sampling risk = 3%

Sample size = 75 customer invoices

Audit procedure: Inspect invoice for proper authorization (credit check, available goods, etc.)

Parameters for Substantive Tests

Acceptable level of risk = 5%

Assessed level of inherent and control risk: Low

Tolerable misstatement = $2,000

Sample size = 50 (outstanding) customer invoices

Audit procedure: Send confirmations for each invoice

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