If Auditors Conducting Attributes Sampling Found That the Entity Deviated

question 61

Multiple Choice

If auditors conducting attributes sampling found that the entity deviated from a prescribed control in nine of the first 10 items examined, the auditor is most likely to:

• A)increase sample size.
• B)increase the computed upper deviation rate.
• C)decrease the tolerable deviation rate.
• D)stop the test and increase control risk.

---

Definitions:

Equal Annual Withdrawals

Regular, identical amounts of money withdrawn from an investment or savings account over a designated period.

Annuity Due

An annuity due is a series of payments made at the beginning of each period in the cycle, such as monthly rent payments, as opposed to at the end of the period.

Present Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.

Compound Interest

The addition of interest to the principal sum of a loan or deposit, where the interest that has been added also earns interest.