As a Result of Tests of Controls, an Auditor Over

question 53

Multiple Choice

As a result of tests of controls, an auditor over relied on internal control and decreased substantive testing. This overreliance occurred because the true deviation rate in the population was:

• A)less than the risk of assessing control risk too low on the auditor's sample.
• B)less than the deviation rate in the auditor's sample.
• C)more than the risk of assessing control risk too low on the auditor's sample.
• D)more than the deviation rate in the auditor's sample.

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Definitions:

Performance Metric

A measurable value that indicates the effectiveness, efficiency, and progress of a business or its processes towards achieving objectives.

Target Market

A specific group of consumers at whom a company aims its products and services.

Annual Report

A comprehensive report issued by a company, detailing its activities, financial performance, and strategies over the past fiscal year, often used by stakeholders to assess the company's health.

Financial Success

The achievement of financial objectives and stability, often measured by profitability, growth, and value generation.