Josh, CPA, is receiving the previous year's audit documentation related to the audit of accounts receivable, and notes that statistical sampling methods were applied. Josh would like to perform a similar sampling application in the current year. He observes that there is more variation in the dollar value of the accounts this year than existed in the previous year. He would also like to reduce the risk of incorrect acceptance, which was 5% in the previous year to 3%in the current year. How will these changes affect sample size?

A. Sample size will increase

B. Sample size will decrease

C. The increase in variation will result in a decrease in sample size, whereas the decrease in the desired risk of incorrect acceptance will result in an increase in sample size. The net effect on sample size is therefore indeterminate.

D. The increase in variation will result in an increase in sample size, whereas the decrease in the desired risk of incorrect acceptance will result in a decrease in sample size. The net effect on sample size is therefore indeterminate.