If the Adjusted Sample Rate of Deviation Exceeds the Tolerable

question 50

True/False

If the adjusted sample rate of deviation exceeds the tolerable rate of deviation,the auditor should reduce the planned level of reliance on internal control.

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Definitions:

Exponential Smoothing

A forecasting technique that applies decreasing weights to past observations as they recede in time.

Exponential Smoothing Model

A time series forecasting technique that applies weighting factors which decrease exponentially to past observations.

Mean Absolute Percentage Error

A measure used in statistics to assess the accuracy of a forecast or prediction, calculated as the average of absolute percentages of errors between predicted and observed values.

Smoothing Constant

A smoothing constant is a parameter in exponential smoothing used to control the level of smoothing applied to a time series.