In Determining the Number of Documents to Select for a Test

question 51

Multiple Choice

In determining the number of documents to select for a test to obtain assurance that all sales returns have been properly authorized,an auditor should consider the tolerable rate of deviation from the control activity.The auditor should also consider: 1.Likely rate of deviations
2) Allowable risk of underreliance.

• A)1 only.
• B)2 only.
• C)Both 1 and 2.
• D)Either 1 or 2.

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Definitions:

Population Mean

The average of a set of characteristics (e.g., values or measurements) of every member in a population.

Sample Variance

A measure that quantifies the amount of variability or spread in a sample data set.

Null Hypothesis

A statistical hypothesis that assumes no significant difference or effect exists between certain characteristics or variables being studied.

Sample Mean

The average value of a set of observations taken from a sample, which is used to estimate the mean of the entire population.