The Risk Which the Auditor Is Willing to Take in Accepting

question 35

Multiple Choice

The risk which the auditor is willing to take in accepting a control as being effective when the True population exception rate is greater than a tolerable rate is the

• A)finite correction factor.
• B)tolerable exception rate.
• C)acceptable risk of overreliance.
• D)estimated population exception rate.

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Definitions:

Residual

The difference between the observed and the predicted value in a regression model.

Actual Value

The true or factual value of a variable or quantity, without estimation or error.

Estimated Value

An approximation of the worth of something, often used in the context of potential outcomes in decision making or investment.

Inverse Relationship

A relationship between two variables in which one variable increases as the other decreases.