In Planning a Statistical Sample for a Test of Controls,an

question 25

Multiple Choice

In planning a statistical sample for a test of controls,an auditor increased the expected population deviation rate from the rates observed in prior audits because of the results of prior tests of controls and the overall control environment.The auditor most likely would then increase the planned:

• A)Tolerable rate of deviation.
• B)Allowance for sampling risk.
• C)Risk of overreliance.
• D)Sample size.

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how spread out the values are from the mean.

Mean

The arithmetic average of a set of values, calculated as the sum of all values divided by the total number of values.

Deviation

The amount by which a single measurement differs from a fixed value such as the mean or expected value.

Normal Curve

A symmetrical, bell-shaped curve representing the distribution of values, scores, or measurements where most occurrences take place near the average.