An audit partner is developing an office training program to familiarize her professional staff with statistical decision models applicable to the audit of dollar-value balances. She wants to demonstrate the relationship of sample sizes to population size and variability and the auditor's specifications as to tolerable misstatement and ARIA. The partner prepared the following table to show comparative population characteristics and audit specifications of the two populations.

REQUIRED
In items (1) through (5) below, indicate for the specific case from the table the required sample size to be selected from Populatio 1 relative to the sample from Population 2. Your answer should be selected from responses (a)-(d), following the items.
1. In Case 1, the required sample size from Population 1 is _______.
2. In Case 2, the required sample size from Population 1 is _______.
3. In Case 3, the required sample size from Population 1 is _______.
4. In Case 4, the required sample size from Population 1 is _______.
5. In Case 5, the required sample size from Population 1 is _______.
Your answer should be selected from the following responses:
a. Larger than the required sample size from Population 2.
b. Equal to the required sample size from Population 2.
c. Smaller than the required sample size from Population 2.
d. Indeterminate relative to the required sample size from Population 2.

Transcribed Image Text:

Characteristics of Population 1 Relative to Population 2 Size Audit Specifications as to a Sample From Population 1 elative to a Sample From Population 2 Tolerable Misstate ment Estimated Population Exception Rate Equal Larger Equal Smaller Equal ARIA Equal Case 2 Case 3 Case 4 Lower li 1테 Higher Higher Lower Larger Larger li 淵 Larger