The Tolerable Deviation Rate _______

question 3

Multiple Choice

The tolerable deviation rate _______.

• A)is the maximum rate of deviation from a prescribed control that an auditor is willing to accept and still use the planned assessed level of control risk
• B)is the minimum rate of deviation from a prescribed control that an auditor is willing to accept and still use the planned assessed level of control risk
• C)refers to the extent that audit fees can go over the roughly agreed amount
• D)relates to how many immaterial misstatements the auditor finds

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Definitions:

Credit Histories

Records that document an individual's or company's past borrowing and repayments, used by lenders to evaluate creditworthiness.

High-Risk Borrowers

High-risk borrowers are individuals or entities considered to carry a greater likelihood of defaulting on loan repayments due to their poor credit history or unstable financial condition.

Interest Rates

The percentage of a sum of money charged for its use, influencing borrowing costs and the return on savings.

Imperfect Competition

A market structure where the conditions necessary for perfect competition are not met, characterized by numerous producers and free entry and exit but with different products.