When Using Sampling for Tests of Controls,which of the Following

question 20

Multiple Choice

When using sampling for tests of controls,which of the following audit consequences may follow?

• A)If sample results indicate that the control is operating effectively,but in fact it is not,control risk will be assessed too low.
• B)If sample results indicate that the control is operating effectively,but in fact it is not,control risk will be assessed too high.
• C)If sample results indicate that the control is not operating effectively,but in fact it is operating effectively,the audit is likely to be faulty because of reduced substantive tests.
• D)If sample results indicate that the control is not operating effectively,but in fact it is operating effectively,control risk will be assessed too low.

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Definitions:

Logistic Regression

A statistical method for analyzing datasets in which there are one or more independent variables that determine an outcome, which is dichotomous.

Multiple Logistic Regression

A statistical technique that models the probability of a certain outcome or event based on more than one independent variable.

Explanatory Variables

Variables in a statistical model that are believed to explain or influence changes in a response variable.

Standard Deviation

A measure of the dispersion or variability within a set of data points, indicating how spread out the values are from the mean.