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:

Shelter Principle

In commercial law, a rule that allows a person who acquires goods in good faith to retain them, even if the sale was not authorized by the owner.

HDC Status

Holder in Due Course Status, which is a legal term that provides certain protections to the holder of a negotiable instrument from claims and defenses that could be raised by prior parties.

Marketability

The ability of a product or service to be sold or accepted in a market.

Free Transferability

The ability to freely transfer ownership of an asset or securities from one party to another without restrictions.