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

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What must an auditor consider when determining the size of the sample for tests of controls?

The deviation rate's relation to the control being tested
The total population size of transactions
The cost of testing versus materiality
The timing of the author's testing

The correct answer is: The deviation rate's relation to the control being tested

When determining the size of the sample for tests of controls, the most critical factor to consider is the deviation rate's relationship to the control being tested. This means that the auditor needs to evaluate how often the control is expected to fail based on prior knowledge or statistical data. If the expected deviation rate is high, the auditor may need a larger sample size to obtain enough evidence about the effectiveness of the control. Conversely, if the expected deviation rate is low, a smaller sample size may suffice, as the likelihood of errors in the population is reduced. This focus on the deviation rate ensures that the auditor collects a statistically valid sample that accurately represents the population, ultimately leading to a reliable assessment of the control's effectiveness. The other factors, while relevant in different contexts, do not directly lead to an optimal sample size specifically focused on evaluating control effectiveness.