What Is an Auditor's Evaluation of a Statistical Sample for Attributes

question 576

Multiple Choice

What is an auditor's evaluation of a statistical sample for attributes when a test of 50 documents results in 3 deviations if tolerable rate is 7%, the expected population deviation rate is 5%, and the allowance for sampling risk is 2%.

• A) Modify the planned assessed level of control risk because the tolerable rate plus the allowance for sampling risk exceeds the expected population deviation rate.
• B) Accept the sample results as support for the planned assessed level of control risk because the sample deviation rate plus the allowance for sampling risk exceeds the tolerable rate.
• C) Accept the sample results as support for the planned assessed level of control risk because the tolerable rate less the allowance for sampling risk equals the expected population deviation rate.
• D) Modify the planned assessed level of control risk because the sample deviation rate plus the allowance for sampling risk exceeds the tolerable rate.

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Definitions:

Scarcity

The basic economic problem that arises because people have unlimited wants but resources are limited, necessitating the allocation of resources.

Unlimited Resources

Access to an infinite amount of materials or assets without any constraints.

Human Wants

The desires and needs of individuals for goods, services, and other intangibles that lead to satisfaction.

Opportunity Cost

The toll taken for not picking the second highest preference when decisions are formulated.