An Auditor Who Uses Statistical Sampling for Attributes in Testing

question 74

Multiple Choice

An auditor who uses statistical sampling for attributes in testing internal controls should increase the assessed level of control risk when the

• A)sample rate of exceptions is less than the expected rate of exception used in planning the sample.
• B)tolerable exception rate less the allowance for sampling risk exceeds the sample rate of deviation.
• C)sample rate of exceptions plus the allowance for sampling risk exceeds the tolerable exception rate.
• D)sample rate of exceptions plus the allowance for sampling risk equals the tolerable exception rate.

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Definitions:

Economic Change

Alterations in the structure, performance, or operations of an economy, often marked by growth or decline.

Manufacturing

The process of converting raw materials into finished goods through the use of tools, machinery, and labor.

Economic Assets

Resources with economic value that an individual, company, or country owns or controls with the expectation that it will provide future benefits.

Wealth

Money and economic assets that a person or family owns.