The questions below relate to estimating the sample size necessary for tests of controls, given the specified decisions for the considerations that affect the sample size. Required: For each of the situations, determine the following i) Sample size . ii) Maximum deviation rate. iii) Allowance for sampling risk. iv) Whether the auditor will support or reject the planned level of control risk. v) Based on your understanding of the relationships between the factors above and sample size, explain the effect of increasing population size while others remain unchanged. vi) Explain the relationship exist between risk, precision, expected error in the population and sample size?

Situation Confidence Tolerable Expected Number Number of Level (%) Error (%) of Errors Deviations found 90 0 057 0 1 90 1001 90 10 2 2 9520 69010 3 Situation Confidence Tolerable Expected Number Number of Level (%) Error (%) of Errors Deviations found 90 0 057 0 1 90 1001 90 10 2 2 9520 69010 3