Walter Cole has decided to use statistical, rather than nonstatistical, sampling to test a client's control over purchase transactions. Specifically, Cole is testing whether vendor invoices are properly approved for payment as evidenced by the initials of authorized personnel qn the face of the invoice. Cole estimates that a sample size of more than 80 could prove uneconomical, since he simply does not have sufficient budgeted audit hours to examine more than 80 documents. In addition. Cole believes that the expected population rate of deviation lies between 2 and 5 percent, and his tolerable rate of deviation cannot exceed 8 percent.

Required:

1.Given the parameters established by Cole, indicate the combination of tolerable and expected population rates of deviation that will achieve a sample size of 80 or less, assuming a 10 percent risk of assessing control risk too low.

2. Can Cole justifiably alter the tolerable rate of deviation for the express purpose of limiting sample size? Why or why not?