If a Particular Internal Control Is Not Followed by the Client

question 64

True/False

If a particular internal control is not followed by the client exactly 6% of the time, and the auditor's tests of that control find three control violations in a sample of 50, the sample is considered to be representative.

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Definitions:

Pareto Efficient Allocation

A situation in economic theory where resources are allocated in such a way that it is impossible to make any one individual better off without making at least one individual worse off.

Pareto Optimal Allocation

A resource distribution scenario where no individual can be made better off without making at least one individual worse off.

Utility Function

A mathematical representation of how different combinations of goods or services provide levels of satisfaction or utility to an individual.

Initial Endowment

The initial allocation or distribution of resources, goods, or wealth among individuals or entities at the start of an economic experiment or model.