An Auditor Who Uses Statistical Sampling for Attributes in Testing

question 42

Multiple Choice

An auditor who uses statistical sampling for attributes in testing internal controls should reduce the planned reliance on a prescribed control when the:

• A)Sample rate of deviation plus the allowance for sampling risk equals the tolerable rate of deviation.
• B)Sample rate of deviation is less than the expected rate of deviation used in planning the sample.
• C)Tolerable rate less the allowance for sampling risk exceeds the sample rate of deviation.
• D)Sample rate of deviation plus the allowance for sampling risk exceeds the tolerable rate of deviation.

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Definitions:

Business Norms

Accepted practices, behaviors, and standards within the business community, often varying by industry or region.

Technological Environment

The aspect of the external business environment that relates to the development, availability, and application of technology affecting businesses.

Extensive Customization

Extensive customization refers to the process of tailoring products, services, or experiences to meet the specific needs or preferences of individual customers, often involving significant modifications.

Global Trade

Refers to the exchange of goods, services, and capital across international borders, driven by the aim of accessing new markets and leveraging global efficiencies.