What Is an Auditor's Evaluation of a Statistical Sample for Attributes

question 77

Multiple Choice

What is an auditor's evaluation of a statistical sample for attributes when a test of 100 documents results in 4 deviations if the tolerable rate of deviation is 5%,the expected population deviation rate is 3%,and the allowance for sampling risk is 2%?

• A)Accept the sample results as support for planned reliance on the control because the tolerable rate of deviation less then allowance for sampling risk equals the expected population deviation rate.
• B)Modify planned reliance on the control because the sample rate of deviation plus the allowance for sampling risk exceeds the tolerable rate of deviation.
• C)Modify planned reliance on the control because the tolerable rate of deviation plus the allowance for sampling risk exceeds the expected population deviation rate.
• D)Accept the sample results as support for planned reliance on the control because the sample rate of deviation plus the allowance for sampling risk exceeds the tolerable rate of deviation.

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Definitions:

Fraudulent Use of Transit

The fraudulent use of transit refers to any illegal actions involving the unauthorized access or use of public transportation systems, often leading to financial loss or damage to the system.

False Pretenses

Obtaining property or money from another person through fraudulent representations or lies.

Insider Trading

Insider trading involves buying or selling a publicly-traded company's stock by someone who has non-public, material information about that stock.

Tipped Information

Insider information that is passed from one person to another, which can be illegal in financial markets.