Assume the Auditor Decides a Control Is Not Effective If

question 18

True/False

Assume the auditor decides a control is not effective if there is a population exception rate of 3%. Assume the auditor accepts this control as effective based on test of control with a sample of 100 items that had 2 exceptions. If the population actually has a 6% exception rate, the auditor correctly accepted the population because the sample was representative of the population.

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Definitions:

Oversight Responsibility

The duty to oversee and ensure proper management and adherence to laws, regulations, and standards within an organization or system.

Money Management

The process of budgeting, saving, investing, spending, or otherwise overseeing an individual or group's capital usage.

Unethical Behavior

Actions that go against moral principles and professional standards, potentially causing harm or conflict.

Power

The ability or capacity to do something or act in a particular way, often referring to the control over individuals or resources in political and social systems.