Using the Audit Risk Model: If Audit Risk Is 0

question 41

True/False

Using the audit risk model: If audit risk is 0.05,inherent risk is 1.0,control risk is 0.20,and analytical procedures risk is 1.0,the risk of incorrect acceptance is 0.25.

---

Definitions:

Mean

The mean is the average of a set of numbers, calculated by dividing the sum of all values by the number of values.

Standard Deviations

Measures that express the variability or spread in a set of data from its mean, showing how much variation there is from the average.

Normal Curve

A symmetrical, bell-shaped curve representing the distribution of a set of data where most occurrences take place in the middle of the range and taper off toward either end.

Z Score

A statistical measurement that describes a value's relationship to the mean of a group of values, expressed in terms of standard deviations from the mean.