The following items apply to sampling from large populations. Select the most appropriate response for each question.

a. From a random sample of items listed from a client's inventory count, a public accountant estimates with a 10 percent ARACR that the CUER is between 4 percent and 6 percent. The accountant's major concern is that there is one chance in 10 that the true deviation rate in the popu¬ lation is

(1) more than 6 percent.

(2) less than 6 percent.

(3) more than 4 percent.

(4) less than 4 percent.

b. If all other factors specified in a sampling plan remain constant, changing the ARACR from 10 percent to 5 per¬ cent would cause the required sample size to

(1) increase.

(2) remain the same.

(3) decrease.

(4) become indeterminate.

c. In a random sample of 1,000 records, an auditor deter¬ mines that the SER is 2 percent. The auditor can state that the exception rate in the population is

(1) not more than 3 percent.

(2) not less than 2 percent.

(3) probably about 2 percent.

(4) not less than 1 percent.

d. If all other factors specified in a sampling plan remain constant, changing the TER from 8 percent to 12 percent would cause the required sample size to

(1) increase.

(2) remain the same.

(3) decrease.

(4) become indeterminate.

(AICPA adapted)

e. If an auditor wishes to select a random sample that must have a 10 percent ARACR and a TER of 10 percent, the size of the sample to be selected will decrease as the esti¬ mate of the

(1) population exception rate increases.

(2) population exception rate decreases.

(3) population size increases.

(4) ARACR increases.

(AICPA adapted)