 Consider whether sampling risk is

reduced to an acceptably low

6 level.

Sample size
Risk of the
Auditor is Sample size
can be
willing to needed
determined
accept.
through:

Exercise of
Statistically
professional
based formula
judgement
 Factors Influencing Compliance
Test Sample Size
Conditions Leading to
FACTORS Smaller Sample Size Larger Sample Size
1. Planned reliance on internal Lower Higher
control
2. Allowable rate of deviation Higher Lower
(tolerable error)
3. Likely rate of population Lower Higher
deviation
4. Required confidence level Decrease Increase

5. Number of items in Virtually no effect on sample size

population unless population is small
6
7
9
9
9
STEP 4 : SPECIFY THE RISK OF ASSESSING
CONTROL RISK TOO LOW AND THE TOLERABLE
DEVIATION RATE.
• Auditors again apply Professional judgment.
• The risk of assessing control risk too low- that is, the risk
that the actual deviation rate exceeds the tolerable
deviation rate.
 AICPA’s Audit Sampling Guide

Planned Assessed Level Of Control Risk Tolerable Deviation Rate

Low 2%- 7%

Moderate 6% -12%

Slightly below the maximum 11% - 20%

Maximum Omit test

STEP 5: ESTIMATE THE EXPECTED POPULATION
DEVIATION RATE
• The expected population deviation rate affects the
sample size in attributes sampling.
• It represents the rate that the auditors expect to
discover in their sample from the population.
HOW TO ESTIMATE?
• The auditors often use the sample results from prior
years, as documented in their working papers.
• Auditors may also estimate the rate based on their
experience with similar tests on other audit
engangements.