As a Result of Tests of Controls, an Auditor Assessed

question 122

Multiple Choice

As a result of tests of controls, an auditor assessed control risk too low and decreased substantive testing.This occurred because the true deviation rate in the population was:

• A) more than the deviation rate in the auditor's sample.
• B) less than the deviation rate in the auditor's sample.
• C) less than the risk of assessing control risk too low based on the auditor's sample.
• D) more than the risk of assessing control risk too low based on the auditor's sample.

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Definitions:

Human Capital

The combined abilities, expertise, and non-physical assets belonging to people that can generate economic benefits for themselves, their place of work, or their local area.

Natural Resources

Environmental assets such as minerals, woodlands, bodies of water, and cultivable land, available in nature and exploitable for economic growth.

Financial Institutions

Organizations that provide financial services, such as banks, insurance companies, and stock exchanges.

Capital Infrastructure

Fundamental facilities and systems serving a country, city, or area, including transportation, communications, sewage, water, and electric systems, that are necessary for economic activity.