Based on a Five Per Cent Risk of Assessing Control

question 24

Multiple Choice

Based on a five per cent risk of assessing control risk too low, how would an auditor interpret a computed upper deviation rate of seven per cent?

• A) There is a five per cent chance that the deviation rate in the population is less than seven per cent.
• B) The auditor is willing to tolerate a deviation rate of seven per cent before deciding not to rely on the control.
• C) There is a 95 per cent chance that the deviation rate in the population equals seven per cent.
• D) There is a five per cent chance that the deviation rate in the population exceeds seven per cent.