The audit team will choose to reduce the reliance on controls if the _____ is greater than the _____a. Tolerable rate of deviation; upper limit rate of deviation.b. Upper limit rate of deviation; tolerable rate of deviation.c. Expected population deviation rate; tolerable rate of deviation.d. Tolerable rate of deviation; expected population deviation rate.

The audit team will choose to reduce the reliance on controls if the _ is greater than the _a. Tolerable rate of deviation; upper limit rate of deviation.b. Upper limit rate of deviation; tolerable rate of deviation.c. Expected population deviation rate; tolerable rate of deviation.d. Tolerable rate of deviation; expected population deviation rate.

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter8: Specialized Audit Tools: Sampling And Generalized Audit Software

Section: Chapter Questions

Problem 21MCQ

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Similar questions

If the _______ exceeds the _______, the audit team would decide to rely on internal control as planned and maintain control risk at planned levels.a. ULRD; tolerable rate of deviation.b. tolerable rate of deviation; ULRD.c. expected population deviation rate; tolerable rate of deviation.d. tolerable rate of deviation; expected population deviation rate.
What options are available to the audit team if the ULRD is greater than the tolerable rate of deviation?
Tolerable error, is the maximum monetary error that the auditor is prepared to accept in the population and still conclude that audit objective has been achieved, is directly related to A.Sample size BAudit risk C.Materiality D.Expected error
In determining the sample size for a test of controls, an auditor should consider the expected deviation rate, desired confidence level, and the * O Nature and cause of deviations O Population size O Risk of incorrect acceptance O Tolerable deviation rate
High levels of assurance mean _______. A. lower levels of non-sampling risk that the sample is not representative of the population B. higher levels of non-sampling risk that the sample is not representative of the population C. lower levels of sampling risk that the sample is not representative of the population D. higher levels of sampling risk that the sample is not representative of the population
If there is a detection of one control deviation, the auditor can do which of the following? a. Increase the sample size O b. Test a compensation control Oc. Amend the auditor's decision to rely on the control O d. All of the above are options for an auditor responding to detection of a control deviatic
The risk that the decision made based on the sample will differ from the decision madebased on the entire population is referred to asa. Audit risk.b. Examination risk.c. Sampling risk.d. Nonsampling risk
Explain how the following test of control will affect the sample size? a. An increase in the extent to which the auditor's risk assessment takes into account relevant controls b. An increase in the tolerable rate of deviation c. An increase in the expected rate of deviation of the population to be tested
.What is the effect on sample size for substantive procedures of an increase in the total error that the auditor is willing to accept increase decrease negligible effect no effect
The sample size of the test of controls varies directly with: Expected Population Deviation Rate Tolerable Rate Risk of Assessing Control Risk Too Low A. Yes Yes No B. No No Yes C. Yes No No D. No Yes Yes E. Yes Yes Yes A B C D E
Which one of the sentences below is FALSE? A. The risk of incorrect acceptance called beta risk has the consequence that the auditor may assume that the population is free of material misstatement. B. The risk of incorrect rejection is called alpha risk and has the consequence that the auditor may assume on the basis of sample results that a population is materially misstated when, in fact, it is not . C. The risk of incorrect acceptance is called beta risk. D. The risk of incorrect rejection very common in audit sampling is called beta risk.
Which of the following best describes the method of determining the ULRD?a. Expected population deviation rate + Allowance for sampling risk.b. Risk of underreliance + Allowance for sampling risk.c. Sample rate of deviation + Allowance for sampling risk.d. Tolerable rate of deviation + Allowance for sampling risk.