Question

Considering each independently, a change in which of the following sample planning factors would influence the sample size for a substantive test of details for a specific account?

a. Expected Misstatement: No. Tolerable Misstatement: No
b. Expected Misstatement: Yes. Tolerable Misstatement: Yes
c. Expected Misstatement: No. Tolerable Misstatement: Yes
d. Expected Misstatement: Yes. Tolerable Misstatement: Yes

Answer 1

Expected Misstatement and Tolerable Misstatement factors influence the sample size for a substantive test of details for a specific account.

Step-by-step explanation:

For a substantive test of details for a specific account, a change in the Expected Misstatement and Tolerable Misstatement factors would influence the sample size. If the expected misstatement or tolerable misstatement increases, the sample size needs to be increased to ensure a higher likelihood of detecting material misstatements. Conversely, if the expected misstatement or tolerable misstatement decreases, the sample size can be reduced.

Therefore, options b. (Expected Misstatement: Yes. Tolerable Misstatement: Yes), c. (Expected Misstatement: No. Tolerable Misstatement: Yes), and d. (Expected Misstatement: Yes. Tolerable Misstatement: Yes) all have the potential to influence the sample size for a substantive test of details.