Question: If the audit team examines a sample of 100 items
If the audit team examines a sample of 100 items, finds six deviations, and calculates an upper limit rate of deviation of 10.3 percent, what is the allowance for sampling risk?
Answer to relevant QuestionsWhat is the audit team’s decision rule with respect to the relationship between the upper limit rate of deviation and the tolerable rate of deviation?How does the audit team determine the acceptable level of the risk of incorrect acceptance? What is the relationship between this risk and sample size?What is the standard deviation? How does it affect the necessary sample size?When evaluating the results of an MUS sampling application, the audit team should com-pare the upper limit on misstatements to the a. Expected misstatement. b. Incremental allowance for sampling risk. c. Projected ...If the upper limit on misstatements is calculated at $ 17,800 and the tolerable misstatement is $ 15,000, what is the minimum amount of adjustment necessary for the audit team to issue an unmodified opinion on the client’s ...
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