An Auditor Who Uses Statistical Sampling for Attributes in Testing

question 86

Multiple Choice

An auditor who uses statistical sampling for attributes in testing internal controls should reduce the planned reliance on a prescribed control when the

• A) sample rate of deviation plus the allowance for sampling risk equals the tolerable rate of deviation.
• B) sample rate of deviation is less than the expected rate of deviation used in planning the sample.
• C) tolerable rate less the allowance for sampling risk exceeds the sample rate of deviation.
• D) sample rate of deviation plus the allowance for sampling risk exceeds the tolerable rate of deviation.

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Definitions:

True Colors

An expression referring to showing one's genuine personality or character, often in contrast to a previously held facade.

Highly Structured

Organized in a very detailed and systematic way, often with clear rules or procedures.

Predictive Validities

The extent to which a score on a scale or test predicts future performance on a related task.

Construct Validity

The extent to which a test or measure accurately assesses the theoretical concept it is intended to measure.