Question #3

Why does the disaggregation variance threshold factor increase when our CRA is lower?

A. Because of the lower inherent risk and no controls testing reliance

B. Because we are testing controls and the reliance on the variance threshold to surface misstatements is reduced

C. Because the detection risk of finding a misstatement decreased when we have tested and relied on controls

D. Because misstatements are harder to find when the data is disaggregated