The sample size for tests of controls is influenced by several factors. Here are some of them:

1. **Risk Assessment:** The higher the risk, the larger the sample size should be. If the auditor assesses that the risk of material misstatement is high, they will want to test more items to gain more assurance that the controls are working effectively.

2. **Tolerable Rate of Deviation:** This is the maximum rate of deviation from a prescribed control procedure that the auditor is willing to accept without altering the planned assessed level of control risk. If the tolerable rate is low, the auditor will need a larger sample size to be confident that the actual rate of deviation is not above the tolerable rate.

3. **Expected Rate of Deviation:** If the auditor expects that deviations from the prescribed control procedures will occur frequently, a larger sample size will be needed to estimate accurately the population deviation rate.

4. **Population Size:** The larger the population from which the auditor is sampling, the larger the sample size needs to be. However, the relationship is not proportional and the increase in sample size is not significant when the population is large.

5. **Confidence Level:** The higher the level of confidence the auditor desires, the larger the sample size needs to be. For example, if an auditor wants to be 95% confident in the results, they will need a larger sample size than if they only wanted to be 90% confident.

6. **Use of Technology:** The use of technology can also influence the sample size. With the use of computer-assisted audit techniques, auditors can often test larger sample sizes more efficiently.

Remember, the objective of the test of controls is to evaluate the effectiveness of an entity's controls in preventing, or detecting and correcting, material misstatements. The sample size is therefore determined based on the auditor's judgment and the factors mentioned above.

Question

The sample size for tests of controls is influenced by several factors. Here are some of them:

1. **Risk Assessment:** The higher the risk, the larger the sample size should be. If the auditor assesses that the risk of material misstatement is high, they will want to test more items to gain more assurance that the controls are working effectively.

2. **Tolerable Rate of Deviation:** This is the maximum rate of deviation from a prescribed control procedure that the auditor is willing to accept without altering the planned assessed level of control risk. If the tolerable rate is low, the auditor will need a larger sample size to be confident that the actual rate of deviation is not above the tolerable rate.

3. **Expected Rate of Deviation:** If the auditor expects that deviations from the prescribed control procedures will occur frequently, a larger sample size will be needed to estimate accurately the population deviation rate.

4. **Population Size:** The larger the population from which the auditor is sampling, the larger the sample size needs to be. However, the relationship is not proportional and the increase in sample size is not significant when the population is large.

5. **Confidence Level:** The higher the level of confidence the auditor desires, the larger the sample size needs to be. For example, if an auditor wants to be 95% confident in the results, they will need a larger sample size than if they only wanted to be 90% confident.

6. **Use of Technology:** The use of technology can also influence the sample size. With the use of computer-assisted audit techniques, auditors can often test larger sample sizes more efficiently.

Remember, the objective of the test of controls is to evaluate the effectiveness of an entity's controls in preventing, or detecting and correcting, material misstatements. The sample size is therefore determined based on the auditor's judgment and the factors mentioned above.

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