An Auditor Selects a Sample of 50 for a Test

question 55

Multiple Choice

An auditor selects a sample of 50 for a test of controls and finds two transactions are not processed in accordance with the controls. The tolerable deviation rate was specified as six per cent. Using the extrapolation approach specified in the auditing standards, the sample results:

• A) do not support the planned assessed level of control risk.
• B) support the planned assessed level of control risk.
• C) are indeterminate without more data.
• D) None of the given answers.

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Definitions:

Iridium

A very hard, brittle, silvery-white transition metal of the platinum group, often used in high-strength alloys.

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Meteorite Impact

A phenomenon where a meteoroid enters Earth's atmosphere and collides with the Earth's surface, potentially causing significant ecological and geological changes.

Embryonic Development

The process by which an embryo forms and develops, starting from a single fertilized cell through to a multi-cellular organism, involving cell division, differentiation, and morphogenesis.