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:

Property Taxes

Taxes levied by local governments based on the assessed value of real property.

Revenue Recognition

The accounting principle that revenue should be recorded when it is earned, regardless of when the payment is received.

Federal Grant

A sum of money given by the federal government to a state, organization, or individual for a specific purpose or project.