Auditor ABC audits Company XYZ$\text{'}$s financial statements and its internal control over financial reporting. Auditor ABC uses attribute sampling to evaluate Company XYZ$\text{'}$s warehouse physical controls. Specifically, Auditor ABC checks whether the warehouse security cameras are working properly. The auditor decides the tolerable error rate to be $5\%,$ and sampling risk is $5\%.$ In the past five years, the failure rate of $xYZ\text{'}$s security camera is $0\mathrm{.}00\%.$

Based on the information above, what is the confidence level, and what is the minimum number of items to pick from the population? $(6$ pts$)$

If the auditor decides to decrease the sampling risk from $5\%$ to $1\%,$ how will sample size change? Please answer A$.$ Increase, B$.$ Decrease, or C$.$ No Change. $(4$ pts$)$

Confidence Level: $95\%$

Confidence Level: $90\%$