An IS auditor may be justified in using a SMALLER sample size under which of the following circumstances?
An IS auditor may be justified in using a SMALLER sample size under which of the following circumstances?
An IS auditor may be justified in using a smaller sample size when there is a lower confidence coefficient. A lower confidence coefficient means that the auditor is willing to accept a higher level of risk that the sample may not accurately represent the population, thus allowing for a smaller sample size.
A. Lower confidence coefficient
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An IS auditor may be justified in using a SMALLER sample size under the circumstance of a higher expected error rate. When the auditor anticipates a higher likelihood of errors in the population, a smaller sample size may be sufficient to detect and assess the extent of those errors. Conversely, when the expected error rate is lower, a larger sample size is typically needed to provide a higher level of confidence in the results.
D. Lower precision amount A smaller sample size can be used when the auditor is willing to accept lower precision or a larger margin of error in the results. This means that the auditor is willing to tolerate a greater degree of uncertainty in the sample findings.
Answer: B Higher expected error rate: The expected error rate refers to the auditor's estimation of the percentage of errors in the population being sampled. If the auditor expects a higher error rate, there is a greater likelihood of detecting errors in the population with a smaller sample size. Therefore, using a smaller sample size may be justified when a higher error rate is anticipated.
when the expected error rate is high, the auditor can be more confident in finding those errors even with a smaller sample So, the right answer will be B
Low confidence coefficient → Small sample size acceptable High expected error rate → Large sample size required Thus, a small sample size may be justified only when the confidence coefficient is low.