Question: The expected population exception rate (EPER) was specified as 1% or 2%, the tolerable exception rate (TER) was specified as 7% or 8%, and the

The expected population exception rate (EPER) was specified as 1% or 2%, the tolerable exception rate (TER) was specified as 7% or 8%, and the acceptable risk or overreliance (ARO) was specified as 10% for all attributes in the audit of acquisitions transactions. Indicate how each of these variables (EPER, TER, and ARO) should be determined. What is the effect on sample size of lowering each variable (EPER, TER, ARO)?

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