An Auditor Who Uses Statistical Sampling for Attributes in Testing

question 45

Multiple Choice

An auditor who uses statistical sampling for attributes in testing internal controls is most likely to reduce the planned reliance on a prescribed control when the:

• A)sample deviation rate plus the allowance for sampling risk equals the tolerable deviation rate.
• B)sample deviation rate is less than the expected population deviation rate used in planning the sample.
• C)tolerable deviation rate less the allowance for sampling risk exceeds the sample deviation rate.
• D)sample deviation rate plus the allowance for sampling risk exceeds the tolerable deviation rate.

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Definitions:

Corporate Tax Rate

The percentage of a corporation's profits that is paid to the government as tax.

CCA Class

In Canadian taxation, a way to categorize depreciable properties for the purpose of Capital Cost Allowance calculations.

Break-Even Lease Payment

The lease payment at which the net present value of leasing costs equals the net present value of purchasing the asset.

Cost Of Debt

The effective rate that a company pays on its total debt, acting as a measure to understand the financial health and leverage of a company.