As a Result of Tests of Controls,an Auditor Assessed Control

question 12

Multiple Choice

As a result of tests of controls,an auditor assessed control risk too low and decreased substantive testing.This assessment resulted because the true deviation rate in the population was ________.

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

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Definitions:

Dummy Variable

A binary variable used in statistical models to represent the presence or absence of a characteristic or effect.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, serving as a critical value for decision-making in hypothesis testing.

Coefficient

A numerical or constant quantity placed before and multiplying the variable in an algebraic expression (e.g., in math or statistics).

Dummy Variables

Numerical variables used in statistical modeling to represent subgroups of the sample in regression analyses.