If the Result Obtained from a Particular Sample for Control

question 82

Multiple Choice

If the result obtained from a particular sample for control and substantive tests of transactions is critical to the formation of an audit opinion, which of the following is the most important to the auditor in concluding of the appropriateness and sufficiency of evidence gathered?

• A)Acceptable risk of overreliance
• B)Estimated population exception rate
• C)Tolerable exception rate
• D)Size of the population

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Definitions:

Specified Period

A specified period refers to a distinct, predefined duration of time during which certain activities are carried out or certain conditions apply, often detailed in contracts, plans, and schedules.

Incremental Productivity Method

A cost-based sales force sizing approach that compares the cost of adding one salesperson to expected additional sales revenue; the company will keep adding salespeople as long as the revenue exceeds the added cost.

Market Potential

This is an estimate of the maximum total sales of a product or service by all vendors to all potential customers within a specific market segment.

Sales Force Size

The total number of individuals in a company's sales team responsible for selling its products or services.