An Auditor Desired to Test Credit Approval on 10,000 Sales

question 460

Multiple Choice

An auditor desired to test credit approval on 10,000 sales invoices processed during the year. The auditor designed a statistical sample that would provide 1% risk of assessing control risk too low (99% confidence) that not more than 7% of the sales invoices lacked approval. The auditor estimated from previous experience that about 2 1/2% of the sales invoices lacked approval. A sample of 200 invoices was examined and 7 of them were lacking approval. The auditor then determined the upper deviation rate to be 8%. In the evaluation of this sample, the auditor decided to increase the level of the preliminary assessment of control risk because the:

• A) Tolerable rate (7%) was less than the upper deviation rate (8%).
• B) Expected deviation rate (7%) was more than the percentage of errors in the sample (3.5%).
• C) Upper deviation rate (8%) was more than the percentage of errors in the sample (3.5%).
• D) Expected deviation rate (2.5%) was less than the tolerable rate (7%).

Grasp the theoretical models that explain the process of dying, including Kübler-Ross' Five Stages of Dying.

Recognize the role of life review therapy in the context of psychology and aging.

Understand the concept of death as a developmental experience.

Identify the emotional responses associated with loss and bereavement.

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Definitions:

Organize

The act of arranging or structuring things in a systematic way for efficiency or order.

Socio-Emotional Selectivity Theory

The theory that older people prioritize regulation of their own emotions and seek familiar social contacts who reinforce generativity, pride, and joy.

Generativity

A concern for establishing and guiding the next generation, typically observed during middle adulthood.

Regulation

The act of controlling or governing according to rules or laws.