Final answer:
To decrease the risk of incorrect acceptance in an audit, an auditor may increase the sample size to ensure a more reliable and accurate representation of the population, which is particularly important when inconsistencies or higher risks are expected.
Step-by-step explanation:
An auditor may decide to decrease the risk of incorrect acceptance if increased reliability from the sample is desired. This typically happens when the auditor needs greater assurance that the sample results are representative of the population. The minimum sample size often increases to improve the precision of the results and reduce the error bounds. In circumstances where many differences are expected between the audit value and the recorded value, or initial sample results do not support the planned level of control risk, an auditor might also consider increasing the sample size to decrease the risk of incorrect acceptance. Additionally, if the cost and effort of selecting additional sample items are low, it becomes more feasible to enhance the sample size without incurring significant additional costs.
Changing the sample size can significantly affect audit outcomes. For example, if we want to lower the sampling error, one way to accomplish it is by increasing the sample size. Likewise, larger samples decrease sampling variability and make for a better, more reliable statistic, as they model the population more closely than smaller samples. This underlines the importance of carefully considering the size of a sample in audit procedures to ensure accurate and reliable results.