As a Result of Sampling Procedures Applied as Tests of Controls,an

question 53

Multiple Choice

As a result of sampling procedures applied as tests of controls,an auditor incorrectly assesses control risk lower than appropriate.The most likely explanation for this situation is that:

• A)The deviation rates of both the auditor's sample and the population exceed the tolerable rate of deviation.
• B)The deviation rates of both the auditor's sample and the population are less than the tolerable rate of deviation.
• C)The deviation rate in the auditor's sample is less than the tolerable rate of deviation,but the deviation rate in the population exceeds the tolerable rate of deviation.
• D)The deviation rate in the auditor's sample exceeds the tolerable rate of deviation,but the deviation rate in the population is less than the tolerable rate of deviation.

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Definitions:

CPFR

Collaborative Planning, Forecasting, and Replenishment, a business practice wherein trading partners coordinate their demand forecasting, inventory management, and production and purchasing planning.

Macroeconomics Factors

The broad external economic forces that affect an economy's performance, including inflation, unemployment rates, and GDP growth.

Seasonal Goods

Products whose demand or availability fluctuates with the seasons of the year, such as winter coats or sunblock.

CPFR System

Collaborative Planning, Forecasting, and Replenishment system designed to enhance supply chain integration by supporting and assisting joint practices.