The Exception Rate the Auditor Will Permit in the Population

question 119

Multiple Choice

The exception rate the auditor will permit in the population and still be willing to conclude that the control is operating effectively is the

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

---

Definitions:

Retained Earnings

The portion of net earnings not paid out as dividends, but retained by the company to be reinvested in its core business or to pay debt.

Non-controlling Interest Share

The portion of equity interest in a subsidiary not owned by the parent company, reflecting the minority shareholders' stake in the consolidated entity.

Profit for the Period

The net income earned by a company over a specific period, reflecting the company's profitability.

Non-controlling Interest Proportion

The share of equity interest in a subsidiary not owned by the parent company, expressed as a percentage of total equity.