If Auditors Conducting Attributes Sampling Found That the Entity Deviated

question 61

Multiple Choice

If auditors conducting attributes sampling found that the entity deviated from a prescribed control in nine of the first 10 items examined, the auditor is most likely to:

• A)increase sample size.
• B)increase the computed upper deviation rate.
• C)decrease the tolerable deviation rate.
• D)stop the test and increase control risk.

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Definitions:

Exponents

Mathematical notations indicating the number of times a base number is multiplied by itself.

Production Function

A mathematical representation that describes the relationship between inputs used in production and the output achieved.

Returns To Scale

A term in economics that describes how the change in the amount of input affects the change in output of a production process.

Production Function

Describes the relationship between the quantities of inputs used in production and the quantity of output produced, illustrating how input changes affect output.