After the Auditor Determines Whether Any Conditions Exist Which Require

question 134

Multiple Choice

After the auditor determines whether any conditions exist which require a departure from a standard unqualified report, the next step in the decision process for audit reports is to:

• A)write the report.
• B)decide the materiality for each condition.
• C)decide the appropriate type of report for the condition.
• D)discuss the report with management.

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Definitions:

Acceptance Sampling

A statistical quality control method where a random sample of items from a lot is inspected to decide if the whole lot should be accepted or rejected.

Defective Items

Products that fail to meet quality standards or specifications, often resulting in returns or waste.

AOQ

Average Outgoing Quality, a measure in quality control that represents the average quality level of products leaving the manufacturing process.

Type I Error

Statistically, the probability of rejecting a good lot.