Certified Internal Auditor (CIA) Part 1: Business Acumen — Question 31

An engagement manager is reviewing the results of sampling work performed by staff internal auditors. Which interim report statement should immediately give the engagement manager cause for concern about the nature and quality of the sampling procedure?

Answer options

• A. The acceptable risk of assessing control risk too low is 10%, the tolerable deviation rate is 5%, the expected population deviation rate is 1%, sample size is 80 out of a large population.
• B. The acceptable risk of assessing control risk too low is 5%, the tolerable deviation rate is 5%, the expected population deviation rate is 5%, the sample size is 1580.
• C. The acceptable risk of assessing control risk too low is 5%, the tolerable deviation rate is 5%, the expected population deviation rate is 1%, the confidence expressed is 95%.
• D. The acceptable risk of assessing control risk too low is 10%, the tolerable deviation rate is 5%, the true, but unknown population rate is less than 5%, the

Correct answer: B

Explanation

The correct answer is B because the acceptable risk of assessing control risk too low is set at 5%, which is critical since it matches the tolerable deviation rate, indicating no room for error. In contrast, options A, C, and D show a greater buffer in acceptable risk or different expected population deviation rates, which are less concerning.