An Auditor Planning Tests of Controls Specifies a Risk of Assessing

question 34

Multiple Choice

An auditor planning tests of controls specifies a risk of assessing control risk too low of 10 per cent and a tolerable deviation rate of six per cent and expects no deviations. For these specifications, the planned sample size should be: (Use the following table to determine your answer.)
Number of factors for sampling risks of:

• A) 60.
• B) 50.
• C) 40.
• D) Some other amount.

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Definitions:

Payroll Tax

A payroll tax is a tax imposed on both employers and employees; it is based on wages that employers pay their staff.

Nominal Wages

Are the amounts paid to employees in current dollar terms, without adjusting for inflation or purchasing power.

Income Cutoff

A specified income level below or above which a person or family is eligible or not eligible for certain financial benefits or services.

Baby Boom Generation

The demographic cohort following World War II, typically defined as those born from 1946 to 1964, known for its significant size and economic impact.