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

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the CPA Auditing and Attestation Exam. Leverage comprehensive materials, flashcards, and detailed explanations for each question. Master essential auditing concepts and techniques with confidence!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.


What factors should an auditor consider when determining the sample size for check requests?

  1. The average dollar value of check requests and allowable risk of assessing control risk too low

  2. The total number of check requests for the year and tolerable error rates

  3. The total cash flow of the company and expected deviations

  4. Only the allowable risk of assessing control risk too low

The correct answer is: Only the allowable risk of assessing control risk too low

When determining the sample size for check requests, various factors play a crucial role, and one of the most significant is the allowable risk of assessing control risk too low. This concept is rooted in the auditor's need to maintain a balance between the level of assurance they require and the efficiency of the audit process. If an auditor assesses control risk too low, they might conclude that the internal controls are more effective than they truly are, leading to insufficient detection of material misstatements. Consequently, the risk involved in this miscalculation must be considered when determining how many items to sample. A higher allowable risk typically results in a smaller sample size, whereas a lower allowable risk necessitates a larger sample size to ensure that the auditor can confidently rely on the controls in place. Other factors that may influence sample size—like the average dollar amount of check requests or the total number of requests—are also important but serve as secondary considerations in this context. They can guide the auditor in understanding the population and potential risk areas but do not carry the same weight as the allowable risk of assessing control risk too low when specifically deciding on the sample size.