The Exception Rate That the Auditor Will Permit in the Population

question 146

Multiple Choice

The exception rate that the auditor will permit in the population and still be willing to use the preliminary control risk assessment is called the

• A) acceptable exception rate.
• B) estimated population exception rate.
• C) sample exception rate.
• D) tolerable exception rate.

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Definitions:

Equal Payments

Regularly scheduled payments of the same amount, common in loans and amortization plans.

Compounded Annually

Interest that is calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan, done once a year.

Compounded Monthly

This refers to the calculation of interest on the initial principal and the accumulated interest over previous periods on a monthly basis.

Investor

An entity or individual who commits funds hoping to achieve monetary rewards.