An Auditor Who Tested 50 Transactions and Found Two Deviations

question 15

Multiple Choice

An auditor who tested 50 transactions and found two deviations from an important control activity could conclude that

• A) The tolerable rate is 4%.
• B) The critical rate of occurrence is 4%.
• C) The sample rate of deviation is 4%.
• D) The expected population deviation rate is 4%.

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Definitions:

Dependent Variable

The outcome factor in a study that changes in response to manipulations of the independent variable.

Predicted Score

An estimate based on a model or algorithm of what a variable's value will be based on other variables.

Regression Equation

An equation that describes the relationship between one dependent variable and one or more independent variables, often used to predict outcomes.

Regression Line

The line drawn based on values in a regression equation. Also known as a trend line.