The best situation that justifies the use of a smaller sample size when testing the accuracy of transaction data is B. It is expected that the population is error-free. The sample size is the number of items selected from the population for testing. The sample size depends on various factors, such as the level of confidence, the tolerable error rate, the expected error rate, and the variability of the population. A smaller sample size means that fewer items are tested, which reduces the cost and time of testing, but also increases the sampling risk (the risk that the sample is not representative of the population).
One of the factors that affects the sample size is the expected error rate, which is the auditor's best estimate of the proportion of errors in the population before testing. A higher expected error rate means that more errors are likely to be found in the population, which requires a larger sample size to provide sufficient evidence for the auditor's conclusion. A lower expected error rate means that fewer errors are likely to be found in the population, which allows a smaller sample size to provide sufficient evidence for the auditor's conclusion.
Therefore, if it is expected that the population is error-free (i.e., the expected error rate is zero or very low), a smaller sample size can be justified.
The other situations do not justify the use of a smaller sample size when testing the accuracy of transaction data. A. The IS audit staff has a high level of experience. The IS audit staff's level of experience does not affect the sample size, but rather their ability to design and execute the sampling procedures and evaluate the results. The IS audit staff's level of experience may affect their judgment in selecting and applying sampling methods, but it does not change the statistical or mathematical principles that determine the sample size. B.
Proper segregation of duties is in place. Proper segregation of duties is an internal control that helps prevent or detect errors or fraud in transaction processing, but it does not affect the sample size. The sample size is based on the characteristics of the population and the objectives of testing, not on the controls in place. Proper segregation of duties may reduce the likelihood or impact of errors or fraud in transaction processing, but it does not eliminate them completely. Therefore, proper segregation of duties does not justify a smaller sample size when testing the accuracy of transaction data. C. The data can be directly changed by users. The data's ability to be directly changed by users does not justify a smaller sample size, but rather a larger one. The data' s ability to be directly changed by users increases the risk of errors or fraud in transaction processing, which requires a larger sample size to provide sufficient evidence for the auditor's conclusion. The data's ability to be directly changed by users also increases the variability of the population, which affects the sample size.
References:
ISACA, CISA Review Manual, 27th Edition, 2019, p. 2471
ISACA, CISA Review Questions, Answers & Explanations Database- 12 Month Subscription2 Audit Sampling - AICPA3 How to choose a sample size (for the statistically challenged)

An IS auditor is analyzing a sample of accounts payable transactions for a specific vendor and identifies one transaction with a value five times as high as the average transaction. The next step that the auditor should do is to request an explanation of the variance from the auditee. This is because the variance may indicate an error, fraud, or an unusual but legitimate transaction that requires further investigation. The auditor should not report the variance immediately to the audit committee without verifying its cause and significance. The auditor should not increase the sample size to 100% of the population without considering the cost-benefit analysis and the sampling methodology. The auditor should not exclude the transaction from the sample population without justification, as itmay affect the validity and reliability of the audit results. References: CISA Review Manual (Digital Version), [ISACA Auditing Standards]

Comprehensive and Detailed Step-by-Step Explanation:
For online payment security, bothconfidentiality(protection of data) andnonrepudiation(ensuring the sender cannot deny a transaction) are essential.
* Option A (Incorrect):DES is outdatedandinsecurefor modern encryption needs. It has been replaced by stronger algorithms.
* Option B (Incorrect):AES provides strong encryption(confidentiality) but does not handlenonrepudiationon its own.
* Option C (Correct):PKI (Public Key Infrastructure)is the best solution because it providesencryption for confidentialityanddigital signatures for nonrepudiation, ensuring bothsecuretransactions andauthenticationof parties involved.
* Option D (Incorrect):AVPN secures network traffic, but it does not address nonrepudiation, which is critical in online payments.
Reference:ISACA CISA Review Manual -Domain 5: Protection of Information Assets- Covers encryption, PKI, and secure payment processing.

Data integrity is the property that ensures that data is accurate, complete, consistent, and reliable throughout its lifecycle. The best data integrity check is tracing data back to the point of origin, which is the source where the data was originally created or captured. This check can verify that data has not been altered or corrupted during transmission, processing, or storage. It can also identify any errors or discrepancies in data entry or conversion. Counting the transactions processed per day is a performance measure that does not directly assess data integrity. Performing a sequence check is a validity check that ensures that data follows a predefined order or pattern. It can detect missing or out-of-order data elements, but it cannot verify their accuracy or completeness. Preparing and running test data is a testing technique that simulates real data to evaluate how a system handles different scenarios. It can help identify errors or bugs in the system logic or functionality, but it cannot ensure data integrity in production environments. References: Information Systems Operations and Business Resilience, CISA Review Manual (Digital Version)

Comprehensive and Detailed Step-by-Step Explanation:
Thespeed at which security threats are mitigatedis akey indicatorof an organization'srisk management effectiveness.
* Option A (Correct):Response time to security threatsmeasures how efficiently security teams detect, analyze, and mitigate risks, providingclear insight into security operations.
* Option B (Incorrect):The number of security controls auditeddoes not indicatehow well risk is being managed, only that reviews are taking place.
* Option C (Incorrect):Log analysis speedis useful, but it does notdirectly measure risk mitigation effectiveness.
* Option D (Incorrect):Risk register entriesindicate known risks but do not provide insight intohow well those risks are managed.
Reference:ISACA CISA Review Manual -Domain 5: Protection of Information Assets- Coverssecurity metrics, KPIs, and risk management evaluation.