[Anonymous]

Which of the following statements is correct concerning statistical sampling in tests of controls?

A.

As the population size increases, the sample size should increase proportionately.

B.

Deviations from specific internal control procedures at a given rate ordinarily result in misstatements at a lower rate.

C.

There is an inverse relationship between the expected population deviation rate and the sample size.

D.

In determining tolerable rate, an auditor considers detection risk and the sample size.

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Answer B. Two types of sampling risk that affect performing tests of controls are:

The risk of assessing control risk too low

The risk of assessing control risk too high

If the auditor assesses control risk too high, which would occur if there are deviations from an internal control procedure in the sample, additional substantive procedures would normally be applied and oftentimes results in the true operating effectiveness of the control at a lower rate.

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If I am reading this correctly, why does deviating from internal control procedures mean a lower rate of misstatements, isn’t it the other way around?