Final answer:
The auditor increased the preliminary assessment of control risk, which may lead to an increased sample size due to higher critical values associated with the increased confidence level required for a thorough evaluation.
Step-by-step explanation:
In the evaluation of this sample the auditor decided to increase the level of the preliminary assessment of control risk because the conditions for control risk have changed, indicating a higher level of risk than initially anticipated. This adjustment typically occurs when the auditor finds evidence that the internal controls are less effective than previously thought. As a result, the sample size may need to be increased, because the critical value increases as the confidence level increases. This means that to maintain a high level of confidence in the audit results, the auditor must examine a larger sample of transactions to ensure a thorough evaluation of the control environment.
In audit terms, sample size and confidence levels are related; as the need for a higher confidence level rises due to increased control risk, so too does the critical value, necessitating a larger sample size to achieve the audit objectives.