The Maximum Rate of Deviation That May Exist in the Operation

question 91

Multiple Choice

The maximum rate of deviation that may exist in the operation of a control policy or procedure before the auditors would reduce reliance on internal control is referred to as:

• A)Acceptable rate of deviation.
• B)Control risk.
• C)Tolerable rate of deviation.
• D)Upper limit rate of deviation.

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Definitions:

Principal's Intention

In a contractual agreement, it refers to the primary party's goal or objective intended through the contract.

Third Restatement

The most recent revision or version of a restatement in law, which aims to rearticulate legal principles for clearer understanding and application.

Apparent Authority

A form of authority that an agent appears to have to a third party because of the behavior or statements of the principal, even if the actual authority was not granted.

Actual Notice

Knowledge of a fact acquired directly through firsthand experience or communication, not through inference or assumption.