The Tolerable Deviation Rate for a Test of Controls Is

question 31

Multiple Choice

The tolerable deviation rate for a test of controls is generally:

• A) unrelated to the expected deviation rate in the related accounting records.
• B) identical to the expected deviation rate in the related accounting records.
• C) higher than the expected deviation rate in the related accounting records.
• D) lower than the expected deviation rate in the related accounting records.

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Definitions:

Dollar Amount

Indicates a specific value of money, usually in U.S. dollars, mentioned in financial transactions, budgets, and pricing.

Minimax Strategy

A decision-making strategy, especially in game theory, aiming to minimize the possible loss for a worst case (maximum loss) scenario.

Largest Cost

Refers to the highest expense in either a specific project or operation typically identified to assess and reduce financial outlays.

Payoff Table

A table used in decision analysis to display the outcomes of different strategies under various states of nature.