Page 223 - Auditing Standards

As of December 15, 2017

Factor Smaller sample size Larger sample size Related factor for
substantive sample

planning

a. Assessment of Low assessed level High assessed level Allowable risk of

inherent risk. of inherent risk. of inherent risk. incorrect
acceptance.

b. Assessment of Low assessed level High assessed level Allowable risk of
control risk. of control risk. of control risk. incorrect
acceptance.

c. Assessment of Low assessment of High assessment of Allowable risk of
risk for other risk associated with risk associated with incorrect
substantive tests other relevant other relevant acceptance.
related to the same substantive tests. substantive tests.
assertion (including
analytical

procedures and
other relevant
substantive tests).

d. Measure of Larger measure of Smaller measure of Tolerable
tolerable tolerable tolerable misstatement.
misstatement for a misstatement. misstatement.
specific account.

e. Expected size Smaller Larger Assessment of
and frequency of misstatements or misstatements or population
misstatements. lower frequency. higher frequency. characteristics.

f. Number of items in Virtually no effect on
the population. sample size unless
population is very
small.

Table 2

Allowable Risk of Incorrect Acceptance (TD)

for Various Assessments of CR and AP; for AR = .05 and IR = 1.0

Auditor's subjective assessment of risk that analytical

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