Step-by-Step Detailed Explanation:
A . The sample rate of occurrence plus the precision exceeds the acceptable error rate:
Correct. If the sample rate of occurrence (estimated error rate in the sample) plus the margin of error exceeds the acceptable error rate, it indicates a potential issue. To refine the estimate and maintain the desired confidence level and precision, the sample size needs to be increased.
B . The sample rate of occurrence is less than the acceptable error rate:
If the sample rate is below the acceptable error rate, there is no immediate need to adjust the sample size.
C . The acceptable rate of occurrence less the precision exceeds the sample rate of occurrence:
This condition does not imply the need to increase sample size but rather suggests acceptable results.
D . The sample rate of occurrence plus the precision equals the acceptable error rate:
This indicates the estimate is at the threshold, but it does not necessitate increasing the sample size unless more precision is required.
CIA Exam Syllabus Reference:
Domain II: Risk Management and Control - Sampling and Error Analysis.