Question: Sampling
You are the auditor of GreenHarvest Ltd, a large chain of eco-friendly home and garden stores operating throughout New Zealand and a company with a considerable number of employees. Before conducting tests of control over payroll expense for the year ending 31 March 2024, you are provided with the following information: The audit manager has informed you that she wishes to increase reliance on payroll controls to a greater extent than is currently reflected in the audit plan. The audit manager has increased the tolerable deviation rate from 3% to 4%. Payroll expense is 13.4% above budget due to an increase in staff, resulting from heightened demand for sustainable living products following a comprehensive government campaign promoting environmental consciousness.
Required: For each item, explain the impact on the sample size for testing payroll controls for GreenHarvest.