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What factors are considered when determining the sample size in attribute testing for internal controls?

Attribute sampling is used for internal controls and we focus on determining whether the control is operating effectively or not. Attribute sampling would focus on yes or no type attributes. There are a variety of things to consider when determining the sample size (amount of instances to test) in attribute sampling:

Reliance on controls – How reliant is the audit team on the company’s internal controls.

Tolerable deviation rate – What is the acceptable level of deviation rate in the population (i.e., how similar or dissimilar are items on a population).

Expected population deviation rate – Before we perform any testing, what is our expectations of the population deviation rate (similar to above).

One aspect that we are not concerned about is the tolerable misstatement as that would be considered when determining the sample size for substantive testing.


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