18 Using the AES technique a CPA found two exceptions in a s

18. Using the AES technique, a CPA found two exceptions in a sample of 60 when the ARO is set at 5%. As a result, the CPA rejects the internal control as being reliable. If the CPA decides to expand the original sample from 60 to 70, then it will (assuming all else stays constant): a. increase the chance of accepting the internal control as reliable. b. decrease the chance of accepting the internal control as reliable. c. neither increase nor decrease the chance of accepting the internal control as reliable. d, increase or decrease the chance ofaccepting the internal control as reliable by 10%.

Solution

Ans is Option a.

a. increase the chance of accepting the internal control as reliable