As a Result of Tests of Controls, an Auditor Found

question 29

Multiple Choice

As a result of tests of controls, an auditor found that they had assessed control risk as too low (their planned reliance on internal control was too high) . This assessment occurred because the deviation rate in the sample was:

• A) more than the risk of assessing control risk too low based on the auditor's sample.
• B) more than the auditor's planned deviation rate.
• C) less than the risk of assessing control risk too low based on the auditor's sample.
• D) less than the auditor's planned deviation rate.

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Definitions:

Unbiased Estimator

A statistical estimator that, on average, accurately reflects the parameter it estimates, without systematic error.

Sampling Distribution

The likelihood distribution of a statistic derived from a random sample.

Biased Estimator

An estimator is considered biased if it consistently overestimates or underestimates the parameter it is estimating.

Confidence Level

The probability that a confidence interval contains the true population parameter, expressing the degree of certainty in estimation.