The Appropriate Assumption to Make Regarding the Overall Percent of Error

question 31

Multiple Choice

The appropriate assumption to make regarding the overall percent of error in those population items containing an error is:

• A)determined using random number tables.
• B)set after a quantitative analysis of client's internal control system.
• C)based on the auditor's personal judgment in the circumstances.
• D)based on statistical analysis using confidence limits.

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Definitions:

Deadweight Loss

The economic efficiency is lessened when a good or service does not attain its equilibrium in the free market.

Tax

Compulsory financial charges imposed by a government on individuals and organizations to fund public expenditures.

Good

An item or product that satisfies a want or need, available for sale or trade.

Market Demand

The total quantity of a good or service that all consumers in the market are willing and able to purchase at different prices.